<div class="phx-topic abstract-wrapper">Like a gardener pruning a rosebush, Sears Holdings continuously prunes and reshapes its supply chain to reduce the cost of sourcing and cut the time it takes to get products into its stores. It’s all part of the $42 billion retailer’s move toward a just-in-time supply chain.</div>

Like a gardener pruning a rosebush, Sears Holdings continuously prunes and reshapes its supply chain to reduce the cost of sourcing and cut the time it takes to get products into its stores. It’s all part of the $42 billion retailer’s move toward a just-in-time supply chain.

<div class="phx-topic">Like a gardener pruning a rosebush, Sears Holdings continuously prunes and reshapes its supply chain to reduce the cost of sourcing and cut the time it takes to get products into its stores. It’s all part of the $42 billion retailer’s move toward a just-in-time supply chain.“It’s a combination of demand analysis and supply chain execution,” said Richard Smith, vice president of global transportation for Sears. The goal is to reduce inventory and supply chain costs. “We adjust orders as we need to in order to move closer to just-in-time deliveries. That’s where we’re moving.”Although almost all the imported products on its store shelves arrive on container ships, ocean freight rates are one element of Sears’ supply chain that Smith doesn’t have to tinker with, at least in the short term. That’s because Smith has just concluded a third set of two-year contracts with its seven chief container carriers, which keeps freight rates level for the length of the contracts expiring in 2015.“I’m a big believer in multiyear contracts,” he said. “We’re satisfied we got a fair deal.”In the negotiations with carriers for the current two-year contracts that began May 1, the carriers did not ask Sears for clauses requiring the periodic adjustment of freight rates based on indexes, which were included in the first set of contracts that expired this spring. Under those contracts, rates were lower every time they were reset because spot rate indices on which the adjustments were based declined in most cases.<a href="http://www.joc.com/special-topics/top-100-us-importers">Read more about the JOC’s Top 100 U.S. importers</a>Smith said Sears maintains close relations with its carriers, which have improved dramatically since 2010 when shipping lines cut capacity so deeply that there wasn’t enough space for many U.S. importers’ cargo when demand spiked, causing shipment delays.“I think both sides learned from that,” Smith said. “The carriers have worked hard to rebuild our trust, and we recognized that we have the responsibility to have accurate forecasting of our demand with enough time so that they can react to us and we can react to them.”With several carriers shifting their all-water, Asia-to-U.S. East Coast deliveries to the Suez route from Panama, Sears and other shippers have more options. For Sears, that means using the Suez route for some of its shipments, but mostly from Vietnam and India, from where the voyage time is about the same as the Panama route. “Our focus is on the time frame involved in moving from origin to destination, and we don’t tell carriers which road to take,” Smith said. “We just need to be satisfied that the time frame and cost are competitive.”Sears, No. 6 on The Journal of Commerce’s ranking of <a href="http://www.joc.com/international-trade-news/trade-data/united-states-trade-data/top-100-importers-2012_20130524.html">Top 100 Importers</a> with 201,500 20-foot-equivalent units last year, also is reviewing its global sourcing patterns to make sure the cost of its products remains competitive. “Where we source merchandise is constantly under review,” Smith said. “But reality tells you that factory infrastructure throughout the world demands that there not be any major changes to where product is sourced in the short term.”Sears, like almost all of its retail competitors, sources what Smith calls “hard lines” in China, while production of apparel is more diversified throughout Europe, the Middle East, Africa and Central America. “The ‘hard lines’ factories, which make patio furniture and presses and that type of thing, are in China, but the apparel sourcing can be more fluid, because they are easier and less complex to set up.”China likely will remain Sears’ major source of hard lines for the foreseeable future, because “nobody can produce the tens of thousands of items that are being produced now mainly in China,” Smith said.Nevertheless, Sears keeps looking. “We’re looking at domestic vendors; we’re looking at vendors in Asia; we’re looking at vendors in Central America; and we’re looking at vendors all over the world,” he said.Sears imports apparel from suppliers around the globe, including Bangladesh, where it is evaluating its position with regard to each factory that supplies it in light of the recent factory tragedies.“Our thoughts remain with the families of the victims of these tragedies,” Smith said. “We are working with other retailers and industry groups on collaborative efforts to address global factory safety issues.” Contact Peter T. Leach at <a href="mailto:pleach@joc.com">pleach@joc.com</a> and follow him at <a href="http://www.twitter.com/petertleach">twitter.com/petertleach</a>.</div>

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Shipper Focus: Sears — Crafting an Optimal Supply Chain