A&P STRIVING TO WORK WITH SUPPLIERS ON LOGISTICS 2004-04-19 (1)

BOBBIE KATZ

MONTVALE, N.J. -- A&P, which has been struggling lately, is now in the process of contacting manufacturers in order to collaborate on ways to drive out costs in the supply chain, according to Don Wojtal, vice president of supply chain and logistics development for the retailer, based here.

"We stepped back," Wojtal said, "and thought about what we were really trying to get at. We looked at where we were good and where we were weak." The upshot was that the chain decided "it was necessary for there to be an openness and honesty with our manufacturers and trading partners to find out where the holes were."

Wojtal made these comments last month at the Logicon 2004 conference in Las Vegas during a panel discussion on the collaborative and forecasting aspects of the supply chain. Also on the panel were Mike Haining, senior vice president of supply chain, TruServ, and Fred Anderson, director of transportation, Dillard's. Logicon is organized by W.B. Research, New York.

Wojtal said A&P is redefining itself and looking toward the future. He noted that the chain has gone through some major consolidations, giving it about 700 outlets around the country operating under seven different banners. In its last financial report in January covering the first 40 weeks of its latest fiscal year, A&P reported a loss of $88.5 million on sales of $8.1 billion, which grew 5.2%.

In regard to relationships with manufacturers, Wojtal said, "We need to know what percentage of business we represent to the manufacturer, and when there are issues, how we resolve them."

In particular, "we need to examine cost per case, and what it's going to cost to deliver that case to the customer. The bottom line is that we're trying to take the next step and collaborate with our trading partners," he added.

A&P is also trying to work with many of its vendors to consolidate orders, and thereby reduce costs such as transportation, he said.

Wojtal also spoke of a need for a more centralized supply chain under "one big super umbrella." While acknowledging that "we need to understand what the product flow is and the SKUs for each individual store, and divvy items up accordingly," he said logistics services need to be managed centrally.

"I'm talking about service from the perspective of on-time delivery, outages, stock-outs and product availability from the manufacturers."