Working both sides of the aisle

For William Parry, vice president of logistics for grocery retailer Giant Eagle Inc. (www.gianteagle.com), supply chain visibility is essential to running a supermarket that carries as many as 60,000 SKUs. However, Parry has a slightly different take on what visibility means.

"It's not so much so you can see what's going on," he explains. "It's being able to see what's not happening. You don't need visibility for things that are going right, but you do need to know where there is an issue."

Giant Eagle's supply chain transactions used to be primarily paper-based. What wasn't on paper wasn't visible across the company's diverse systems. While the retailer could electronically capture data on fuel consumption with one system, for example, there was no means for sharing or communicating that data to another system.

The situation was much the same with the routing system — once a solution was created by the routing system, it had to be communicated manually. Today, however, the retailer has visibility into its logistics network thanks to its adoption of technology from G-Log Inc. (www.glog.com) for inbound and TMW Systems Inc. (www.tmwsystems.com) for outbound.

For inbound, about half of Giant Eagle's truckload orders are managed either through the company's private fleet or with its contract carriers. The company uses a great deal of less-than-truckload (LTL), as well, Parry notes.

"About 40% of the overall business is managed, one way or another, with our private fleets and contract carriers, and the other 60% is handled by our vendors," he says. Most deliveries from company DCs to retail stores are handled by the private fleet.

Giant Eagle has five DCs. Its large DCs in Pittsburgh and Cleveland mirror each other with grocery, dairy and produce. The retailer also has single-source facilities. There is a general merchandise DC just south of Pittsburgh that services all stores, as well as single-source facilities for frozen foods and fresh meat.

Giant Eagle also uses a web-based performance monitoring application from TMW that helps determine if its business goals are being met. "Every morning when our transportation people log onto their computers, they see everything that happened with their fleet the day before," Parry explains.

Now with fuel data captured and shared at the end of each trip, the company's transportation managers can set goals for drivers. "Just by being able to publish our results goals there, our idle time was reduced by 15% the first year," he notes, "and today we're over 25% saved."

Saving on fuel by reducing idling isn't the only use made of the data, Parry points out. "Eliminating deadhead miles uses the same concept as reducing idling. Since we now have engineered data in place, we can establish standards for our drivers. We're able to accurately measure activities applicable to a trip or backhaul or a shuttle run. We've established a baseline and are working on reducing deadhead miles."

Giant Eagle has also made a great effort to use its data and systems to maintain good working relationships with its vendors.

"Knowing what's important to our vendors, we've expanded use of drop trailers and employ unloading services at our DCs to keep goods flowing," explains Parry. "We've been very successful in being able to not only improve things for us, but for our vendors as well." As a result, vendors that might have thought about passing on rate increases or charges for wait time haven't done so.

On the other side of the retail aisle, consumer packaged goods (CPG) company Newell Rubbermaid Inc. (www.newellrubbermaid.com) is using shipment management technology to reduce 5-10% of its transportation spend.

As Mark Michener, the company's global manager, transportation systems, explains, shipments move from a distribution center (DC) to a final customer; a DC to a warehouse; a DC to a center point; a vendor to a customer, as well as direct shipments that bypass a DC altogether. Newell Rubbermaid has 25 different divisions moving everything from plastic storage containers to saw blades. The company has 10 primary shipping locations handling the majority of its volume.

A global marketer of consumer and commercial products, the $6.7 billion company's brands include Sharpie, Calphalon, Rubbermaid, Graco, Levolor, Paper Mate, Parker and Little Tikes, among others. As Newell Rubbermaid has acquired these companies, each new acquisition brings along its legacy systems. This has led the company to implement a transportation and logistics solution from G-Log to replace those legacy systems. Newell Rubbermaid now has webbased visibility into centralized data available across the entire company.

"The G-Log system gives our planners visual insight into what is being shipped as well as what we plan to ship," explains Michener. "The planners are able to query and select information needed to validate decisions and actually execute." Too, there is savings on the IT spend since there are fewer systems overall to maintain.

"Our approach to transportation and distribution has changed a lot in the last two or three years," explains Michener. "We put the G-Log solution into Rubbermaid Commercial Products in Winchester, Va., going live in January 2003. At the time, they were the only location with any type of automated load planning application. These people understood how to work in such an environment, which helped speed the learning curve."

Newell Rubbermaid had locations that performed routing with technology that included shipping functionality within order management systems or used entirely manual processes where the U.S. was broken into regions and routes.

Rather than putting the solution to work in all locations simultaneously, Newell Rubbermaid installed it plant by plant. "Our businesses are so different," notes Michener. "The commercial products customer base is primarily distributors. In other plants the primary customers are retailers. We had to adapt our implementation methodology to the different businesses. We were able to meet unique requirements by modeling the different businesses within the application."

For Michener, a key benefit of the shipment management system has been its ability to select the optimal mode service provider as well as consolidation of loads. Transportation is more of an undisciplined functional area. "By utilizing the G-Log application, we are able to monitor and drive a lot of the carrier decisions," he notes, "so we have greater awareness of our capabilities on the part of our core carriers. They are aware of what locations are using the system as they submit pricing proposals."

Since the application handles all aspects of moving product — from shipment order through freight settlement — it provides a number of metrics that are useful to Michener. For instance, it allows Newell Rubbermaid to evaluate carrier performance.

"We conduct regular reviews," says Michener. "It's a matter of defining what key milestones we want to see within an order or transportation cycle, then getting the information from our carriers to measure how well they did against those milestones." As well, the metrics allow Michener to measure service by customer in order to see how well the company is doing in getting product to the customer on time.

To date, Newell Rubbermaid has only used the shipment management application on the outbound side of the business. Michener is looking for ways in which to use the platform for inbound shipments as well.

Although Newell Rubbermaid has sought capacity from a variety of sources, including brokers, the company is working now to develop processes that will allow it to communicate sooner for truckload business. The goal, Michener explains, is to help the carriers plan better so that Newell Rubbermaid doesn't run into capacity situations.

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