To improve inventory turns, Big Lots initiated a "Flow- Through Project" to cross-dock merchandise through their distribution centers (DCs). They wanted to eliminate "dwell time" in the supply chain and get the goods to the stores as fast as possible and on the shelves. Cross-docking saves money by speeding up inventory turns and eliminating the need for warehouses to store merchandise. Merchandise arrives at one side of the DC and is split up into shipments and is loaded onto trucks on the other side and immediately sent out to the stores.
One factor in the success of the flow-through initiative is having floor-ready merchandise that can be expedited through the supply chain without having to be re-ticketed or the store associate needing to prep it for sale. Big Lots wanted to touch the goods as little as possible, so they wanted to work with the vendor to create the right product or get it in a format that would go through the supply chain untouched. They wanted to manage that flow by pre-allocating the merchandise. Then when the shipments hit the distribution center, Big Lots could crossdock them and get the merchandise out to stores immediately. But success depended on receiving accurate and timely electronic data interchange (EDI) data from vendors (including advanced ship notifications, or ASNs). With timely and accurate ASNs, Big Lots would not have to open the shipment. The data would arrive ahead of time and get scanned into the system. When the shipment arrived, they would already know how many of each item is in each box on each palette.
Success with this initiative would require a good supplier management system. Big Lots wanted to partner and collaborate with their vendors to make sure that the goods meet their standards and get to the store shelf as quickly and efficiently as possible. They were not interested in relying on a chargeback program that simply punishes vendors for non-compliance. They wanted to collaborate and share data with their vendors to drill down to the root cause of issues and improve performance. When vendors consistently meet Big Lots" standards, the vendor will become flow-through eligible and Big Lots will be able to buy less goods, have faster inventory turn, and the merchandise will be available to the customer more quickly.
One factor in the success of the flow-through initiative is having floor-ready merchandise that can be expedited through the supply chain without having to be re-ticketed or the store associate needing to prep it for sale. Big Lots wanted to touch the goods as little as possible, so they wanted to work with the vendor to create the right product or get it in a format that would go through the supply chain untouched. They wanted to manage that flow by pre-allocating the merchandise. Then when the shipments hit the distribution center, Big Lots could crossdock them and get the merchandise out to stores immediately. But success depended on receiving accurate and timely electronic data interchange (EDI) data from vendors (including advanced ship notifications, or ASNs). With timely and accurate ASNs, Big Lots would not have to open the shipment. The data would arrive ahead of time and get scanned into the system. When the shipment arrived, they would already know how many of each item is in each box on each palette.
Success with this initiative would require a good supplier management system. Big Lots wanted to partner and collaborate with their vendors to make sure that the goods meet their standards and get to the store shelf as quickly and efficiently as possible. They were not interested in relying on a chargeback program that simply punishes vendors for non-compliance. They wanted to collaborate and share data with their vendors to drill down to the root cause of issues and improve performance. When vendors consistently meet Big Lots" standards, the vendor will become flow-through eligible and Big Lots will be able to buy less goods, have faster inventory turn, and the merchandise will be available to the customer more quickly.
No comments:
Post a Comment