For many years, Horizon International has supported clients who supply to major retailers. Our extensive retail logistics experience has been gained through working with a broad range of clients from start-ups through to global brands.
Working with Retail Distribution Centres presents a number of challenges –
Accuracy and quick-turnaround are the keys. This is an industry where you simply can’t afford to make mistakes.
Compliance is a top priority. Retail DCs generally issue a strict Routing Guide or Service Level Agreement (SLA), which includes very specific requirements which must be adhered to. This can include the specifications and quality of pallets, the pallet-build configuration, the size and shape of labels, what the labels must include (UPC/EAN barcodes, SKU codes, description of goods, quantities, GS1-128 shipping labels, etc.), where (to the mm) the labels must be positioned on each individual carton, how and when to book deliveries or collections, how many days’ notice must be given, how information/data must be transmitted, what ASNs (Advanced Shipping Notices) or Packing Slips must include – and what format/file-type they must be presented in – and many more.
Many retailers insist on APIs (Application Program Interface) between their systems and either the supplier’s ERP (Enterprise Resource Planning) system or the retail logistics partners’ WMS (Warehouse Management System). In most cases, it is the supplier’s responsibility to ensure that the API is set up – and pay any resulting charges.
Failure to meet any of the set criteria runs the risk of incurring penalties – more commonly known as “chargebacks”, imposed by the Retail DC. These commonly range from $100 to $1000, depending on the scale of the error. Such chargebacks can have a significant impact on margins, which may already have been squeezed hard by the retailer. At Horizon, we believe that chargebacks due to non-compliance are simply a sign of poor preparation.
Recently, Horizon implemented an end-to-end supply chain solution for a new client in the toys/games sector. The client sources from multiple suppliers in China – and supplies to major retailers in the USA, including Toys R Us, Barnes & Noble, Cracker Barrel, Kohls, Disney Stores and many others.
Horizon worked closely with the client, from the point that they placed their purchase orders with their Chinese manufacturers – through to final mile delivery to the US retailers.
Horizon’s solution included managing the consolidation of orders from multiple vendors in China to optimise freight spend, forwarding the product by both ocean and air into Los Angeles and New York, customs clearance of goods – followed by warehousing and fulfilment of orders to retail DCs across the US.
For the client, being a first-time importer into the US, it was imperative that all US customs related elements were considered – and any preparations or accreditations obtained in advance of shipment. This included supporting the client to obtain FDA (Food & Drug Administration) approval for specific products and assisting the client to identify the correct HTS codes for their products, thereby ensuring correct customs submissions were made.
Prior to commencing with the handling of orders, we ensured that the numerous Retail DC SLAs and Routing Guides were thoroughly reviewed and all elements relating to delivery, systems integration and compliance were clearly understood by all members of the account management team.
To ensure a seamless solution, Horizon captured all purchase order data at unit/line level via hiCloud – our online purchase order management system. By recording this data, we were able to transmit full ASNs (Advanced Shipping Notice) into our WMS BEFORE the orders had even left the factories in China!
From the point that the purchase order was placed, orders released by the suppliers – and transit by ocean from China to the US, all key milestones were checked and updated – providing our client with live visibility of progress of each order – to unit level. Any deviation in schedule, due to delay in production, sailings or customs clearance were communicated “live” to our client via hiCloud – enabling them to consider contingency options.
As a result of the accurate and advanced ASN information flow into Horizon’s WMS, the receiving process into our Los Angeles and New Jersey warehouses was seamless and swift. This enabled us to achieve a quick turnaround with fulfilling orders.
All activity was recorded via Horizon’s WMS – enabling our client to view progress throughout.
The first batch of orders were despatched 100% complete, on time and without any compliance issues to 5 different US Retailers.
This implementation was managed by Horizon’s Los Angeles and New Jersey teams, supported by Tony Leach – Global Supply Chain Director, Richard Perriman – UK Supply Chain Manager – who both flew in from the UK and Charles Noh – Director, Supply Chain Director, based in Los Angeles.
Following the successful US implementation, the client is now supplying to UK Retailers. Their first order was delivered to Disney Stores UK last week – again, 100% complete, on time and in good order.
Horizon would welcome the opportunity to support any clients who supply to Retail DCs. Our retail logistics expertise, network and systems are perfectly matched to serve this challenging market.
If your company is planning to enter this market and would like to discuss our retail logistics experiences and solutions, please contact us to schedule a meeting with one of our supply chain experts.