THREE MANUFACTURERS SIGN UP FOR 'MASTER VENDOR' SERVICE

JAMES TENSER

RAMSEY, N.J. -- Clorox Co., Tambrands and First Brands are the first brand marketers to sign on for a consolidated shipping, selling and service pilot being conducted by Pezrow Cos., a full-service brokerage based here.

When the program gets underway in September, Pezrow will be the first among a handful of brokerage firms attempting to resolve some underlying logistical conflicts posed by Efficient Consumer Response: Continuous replenishment requires more frequent but smaller deliveries, which force all but the largest manufacturers to ship more less-than-truckload quantities to retailers.

"Our goal is to reduce or eliminate all LTL deliveries for our principals while improving lead time to three to five days," Michael Geary, Pezrow chief operating officer, told Brand Marketing.

In the process, the broker also expects to help manufacturers pare down invoicing and reconciliation costs and control out-of-stocks, while spreading customer service and technology investments across the combined sales base.

While Pezrow may be some weeks or months out in front in readying its implementation, several other brokerage firms are actively developing similar customer service offerings: Budd Mayer, Atlanta, is advancing a broker-managed inventory concept; Kelley-Clark, Los Angeles, is working on what it calls "broker consolidation"; and Mancini & Groesbeck, Salt Lake City, and Sales Force, Chicago, are working toward similar goals.

Geary said Pezrow's role will amount to being a "master vendor," who efficiently coordinates sales, service and shipping of multiple manufacturers' products to customers in its trading area. "Wholesalers and retailers are demanding an improvement in customer service and distribution to reduce their costs," Geary said. As one of the leading suppliers to those customers, the broker can seek and obtain "preferred vendor" status.

Under what Pezrow is calling Consolidated Ship, products from the three manufacturers, and others

yet to sign on, will be combined into full truckloads for shipment to participating retail and wholesale distribution centers in Pezrow's New York-New England trading area.

The brokerage firm is positioning the program as a value-added service for both manufacturers and retailers, he said. Pezrow's role will be managing product flow information and coordinating the various parties. A third-party consolidator and warehousing firm will do the physical handling and shipping.

Tambrands, Clorox and First Brands have been active in the development of Pezrow's service program over a period of nearly 18 months as part of a steering committee devoted to studying the idea.

"The more manufacturers can work together to deliver full truckloads to their customers, the better. Pezrow's idea can be a conduit for doing that," said Fred Schaeffer, director of logistics for Clorox.

"We are hugely supportive of Pezrow's initiative in this and we would like to see more of our brokers doing the same thing," said Charles J. Chapman, executive vice president of Tambrands. "The issue of capturing systemwide savings will drive everyone toward the fewest number of trucks stocked with just what is needed at that moment to fulfill customer needs," Chapman added.

Joe Oliver, Pezrow's president and chief executive officer, observed that his firm was attempting to do something for its manufacturers that is similar in some ways to the "Streamlined Logistics" activities recently announced by Procter & Gamble. See related story, Page 11.

Within its trading areas, he emphasized, a major broker like Pezrow can be as significant a supplier to its retailer customers as a company like P&G is -- typically among the top-three resources. Hannaford Bros., Scarborough, Maine, is one of the customers looking forward to the benefits of Pezrow's program, said Ken Johnson, vice president of nonfood for Hannaford. "When you are dealing with supercenters right around the corner, cost of product will become very critical. Most have purchasing power greater than most supermarkets they have to compete with. What we will have is 10 vendors that we can now look at as one vendor," he said.