RECEIVING AT DCS ADJUSTED BY DISTRIBUTORS

MICHAEL GARRY

DALLAS -- Hannaford Bros. soon plans to enhance a Web-based appointment system for carriers of shipments into its distribution centers so that it will assign deliveries to specific doors based on the content of the load.

This initiative, along with others at Hannaford and at Wegmans and Associated Grocers of Baton Rouge, were the subject of a wide-ranging panel discussion on distribution topics at the 2004 Productivity Convention & Exposition held here at the Wyndham Anatole Hotel Oct. 17 to 19. The event was sponsored jointly by Food Marketing Institute and International Foodservice Distributors Association.

Interfacing with its warehouse management system, Hannaford's appointment system provides "visibility into all inbound loads and better capacity-planning for docks," said Michael LaCourse, director of distribution and transportation, Hannaford Bros., Scarborough, Maine.

LaCourse participated in the panel discussion, titled "Revenue Enhancement and Cost-Savings Opportunities," with Pamela Erb, vice president, distribution, Wegmans Food Markets, Rochester, N.Y., and John Gillespie, senior vice president, distribution, Associated Grocers of Baton Rouge, La. The discussion was moderated by Dan Raftery, president, Raftery Resource Network, Antioch, Ill.

As part of its appointment system, Hannaford also employs a "track-and-trace" strategy, giving purchase orders 48 hours to be turned into delivery appointments. Those that fail to meet the deadline prompt calls or e-mails to vendors or carriers asking, "Where is the freight?" said LaCourse. "This has improved service levels."

In response to a question from Raftery, LaCourse noted that Hannaford ends up tracking down about 20% of its orders. Appointments are still missed, he added, though the number, which he could not specify, has been reduced.

Asked by Raftery what Hannaford does when an appointment is missed, LaCourse replied, "We go to our carrier base and move freight around from carrier to carrier through our brokerage department to get the freight on time." Hannaford employs just three people to handle unresolved purchase orders.

Gillespie acknowledged that at Associated Grocers, about 10% of orders result in missed appointments at its DC. "If a trucker doesn't feel he's going to get into your dock and he's 20 minutes late, he'll say, 'The heck with it,' get a different load and reschedule," he said. Gillespie praised LaCourse's appointment system as "awesome." If a distributor is lax on its appointments, he said, then "someone else will get them" and be able to "generate revenue because they will have stuff in stock."

Erb of Wegmans noted that, in response to a carrier capacity shortage, her company has adopted a "flexible receiving" policy, with no set appointments, for the small number of shipments that the chain does not receive via backhauls. "This has created challenges in our DCs to juggle a changing landscape, but it's paid off," she said. The chain's flexibility has resulted in its receiving preferential treatment from carriers that has helped with backhauls.

Backhauls -- bringing back goods from vendors on trucks returning from store deliveries -- has become a key strategy for Wegmans, said Erb. "We make sure every returning trailer has something on it," she said. Backhaul has also become very profitable, she added. "We're finding suppliers saying, 'Please backhaul this. We'll pay you what it's worth or more in some cases."'

Because of the capacity shortage, Hannaford is looking at getting back into hiring out its own fleet -- something it abandoned two years ago, said LaCourse.

The panelists also spoke of changes they are making in the DCs to cut costs or make money. Gillespie said Associated Grocers has "knocked bricks out of doors" to accommodate paper loads and slip sheets, and changed slot sizes to buy in pallet quantity. The cooperative is even paying attention to RFID (radio frequency identification), anticipating that suppliers may have an "RFID pricing bracket" for retailers that employ the technology, Gillespie said.

Associated Grocers has also started to use its DC for DSD products normally delivered by vendors directly to stores. "It's hard for some stores to get DSD items, so we have partnered with some DSD vendors to store their products," said Gillespie.