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FEATURED INFORMATION ON BREAKTHROUGH
PROGRAM IN RETAIL LOGISTICS:
This article (which follows) on Bon-Ton Stores success story
with completely integrated supply chain using the Shippers
Commonwealth TMS program appeared in the June 2008 edition
of "Integrated Solutions For Retailers". See also
the feature article on this program that appeared in November
2007 edition of "Inbound Logistics" in Case Studies
section of this Web Site, which also features the CSCMP Award
Nomination White Paper on this breakthrough automation initiative.
Also see the Live Videocast on this program featuring Bob
Hook, VP Transportation & Logistics for Bon-Ton Stores
as shown on Supply Chain Television/Supply Chain Digest from
March 2008 (as accessible in the Events section of this Web
Site).
When Bon-Ton Stores, Inc. recently acquired the Northern
Department Store Group (NDSG) from Saks Incorporated, its
sales nearly tripled, store count was doubled, and four DCs
were added. The acquisition, although a great growth opportunity
for the retailer, left Bon-Ton with a large amount of shipping
information (such as inbound freight costing, load distribution,
and freight payment) to manage. “The Bon-Ton footprint
now reaches across 23 states, and along with this, we have
approximately 2,500 vendors operating from 3,000 shipping
locations to contend with,” says Robert Hook, divisional
VP of transportation at Bon-Ton.
Before Bon-Ton acquired the new stores, the retailer manually
entered shipping and receiving data into an older PC-based
TMS and interacted with vendors and carriers via e-mail. This
approach had become labor-intensive and offered little flexibility.
For instance, when an employee needed to track a shipment,
they had to sort through their e-mail inbox to find the correct
order. For a retailer as big as Bon-Ton, this process was
very time-consuming. The retailer began searching for a new
TMS before it acquired NDSG to better manage the transportation
routing and shipping information.
A TMS provides best-cost recommendations for routing shipments
based on unique shipping factors such as weight, origin, and
destination. In addition to these factors, it considers all
modes of transportation when routing. The TMS also provides
visibility to track inbound freight. With a TMS, a retailer
can integrate all processes, from load tendering to freight
payment, into a single system. Having all of these processes
integrated allows easier and collaborative communication among
all parties involved with transportation because the processes
are organized and visible within one system.
When Bon-Ton attained the additional stores, the retailer
converted the existing Bon-Ton stores over to NDSG’s
legacy mainframe system, which included a new warehouse management
system (WMS), as well as new purchasing, accounts payable,
and general ledger systems. Hook notes that, “With the
amount of transportation information Bon-Ton now had to handle,
we realized that an updated TMS was critical to our ability
to manage transportation in light of the acquisition.”
Leverage Hosted TMS Visibility To Manage Growth
Bon-Ton chose to implement a hosted TMS system from Shippers
Commonwealth. With this hosted system, data is fed from the
stores and vendors into a server at Shippers Commonwealth.
“We chose the Shippers Commonwealth TMS because we knew
of instances in which it had produced results by lowering
freight costs. We also factored in ease of implementation
and system support that is inherent in a hosted system,”
says Hook. The retailer, vendors, and carriers can go to a
URL and log in to the system to view the inventory in transit,
routing, shipment availability, and delivery status. The visibility
that the TMS offers eliminates the time and labor associated
with an e-mail approach. The TMS also allows for seamless
communication among the retailer, vendor, and carrier. The
TMS combines shipping information and vendor information (e.g.
freight rates) to calculate the route with lowest possible
cost and allows Bon-Ton visibility of this cost to compare
with statements from the carriers. Being able to compare the
TMS projected costs with actual carrier cost is one way to
assure Bon-Ton is not being overcharged.
To integrate the TMS, Bon-Ton first had to create a database
of freight rates for more than 40 carriers, covering all possible
origins that ship to any of the retailer’s DCs. Because
Bon-Ton was purchasing merchandise from vendors throughout
the United States, it was necessary to consider the different
time zones when creating the database and integrating the
TMS. After this database was created, the retailer had to
enter all vendor shipping locations into the Web portal, including
geographical information, hours of operation, and contacts
at each.
Following the acquisition of NDSG, Bon-Ton had many new staff
members and had to contend with varying levels of technology
understanding. A Web-based TMS was new to the staff, and Shippers
Commonwealth supported the transition from the previous TMS
by providing training and education on the new system not
only to the retailer, but also to the vendors and carriers.
Since integrating the TMS, Bon-Ton’s freight cost has
been reduced by 19%. The TMS also has given the retailer the
information necessary to develop key performance indicators
(KPIs). Bon-Ton introduced these metrics to its carriers to
set and measure expectations for on-time pickup and delivery,
load acceptance, and claims ratio.
The TMS Bon-Ton implemented has eased transportation challenges
the retailer faced with the acquisition of NDSG. The TMS also
will assist Bon-Ton with any additional growth by tying in
new vendor and carrier locations to allow clear communication
and best-cost solutions for transportation.
For More Information On Shippers Commonwealth Go To http://www.shipperscommonwealth.com/
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