Tuesday, June 12, 2012

Automated Store Replenishment – Volume XXIII

What can your suppliers do to help you? I would like to be able to tell you that your suppliers are ready and willing. They may be willing, but they probably won’t be ready. Someone will need to help them help you.

The main difficulty your suppliers will have is ADDRESSING & fixing their problems first. Having thousands of stores to service, with many of those stores using a wide variety of systems, they are being asked to deal with all types of interfaces, including paper invoices, faxes, EDI, PCATS, XML, FLAT ASCII, CSV, XLS, DB400… the list appears to be endless. Our initial objective is to provide suppliers with a common link between themselves and their retailers. For example, it does not matter what type of interface they are using today, our system handles the conversations between suppliers and their retail customers’ systems. However, this is only an interim step. Our goal is to integrate suppliers with their retail store customers, so suppliers may peer into certain attributes of the store inventory in real-time to determine how to load the trucks. At present, we are creating suggested orders and sending them to the supplier using File Transfer Protocol. It takes only a few seconds for the process to complete.

Over a year ago, we formed a relationship with a large grocery supplier to automate grocery, food and drink purchases. We have made great strides in our efforts. (We had already automated fuel purchases four years ago.) The following situations are only a few of the problems you may run up against during your Automated Store Replenishment project.

For us, the first stumbling block was not all suppliers have a handle on UPC codes yet. They continue to use a Vendor Identification Number (VIN) that they assign to identify products. This is a requirement for them, as identical products come in various sizes. Our system uses one VIN and several levels of packaging to identify a unique product in multiple sizes. However, instead of using ‘123456’ for a package of twelve, and the same number, but a different size to signify a single unit, your supplier may identify a single unit with a different number entirely, like ‘345678’ being a package of twelve ‘123456’ items. They expect the store manager to use the proper VIN when ordering a specific product in a particular size. Some vendors accept single-size orders; for example, you may be able to order three cans of beans out of a case of twenty-four, but you pay a premium for that service. This leads to interesting mistakes such as ordering six-gallons of antifreeze and receiving six-cases instead, or worse; ordering six-gallons, receiving the proper amount and being billed for six-cases.

Some suppliers persist in specifying sizes as BOX, CTN, PACK, CASE, EACH, etc.; which means absolutely nothing to a computer, unless someone tells the system what is in a box, carton, or a case. Sometimes they get the sizes mixed up, especially with cartons of cigarettes that have two packs sold together as one, salable unit. There are five two-pack units in those cartons, not ten.

Items within a box that may be in different sizes and shippers create more headaches; such as three, three-packs of cigarettes and one-single in a carton. Shippers may contain multiple products in various sizes. We had to develop a program to explode packages into items so they could be processed as individual products, and we had to figure out a way to assign ‘costs’ to the items as well. We don’t always get the contents of new shippers until after the order has been shipped, so we have to contact the supplier to get that information. Luckily, we receive the orders by 4:30AM on the morning the order is due to arrive at the stores, so we have time to fix the problem before the merchandise reaches its destination. Having a third-party partner to catch and correct these problems has proven to be a great asset for our clients.


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