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"Inovis is a leading provider of on-demand Business Community Management solutions that empower companies to transact, collaborate and optimize communications with
every facet of their business communities. By standardizing and automating mission-critical business interactions, companies can dramatically reduce the complexity and cost of supply chain communication."
Source: Inovis
Case Study: Big Lots
Supply Chain is also known as :
Supply Chain,
Supply Chain Management,
Integrated Supply Chain Management,
Transportation Management,
Manage Your Entire Supply Chain,
Supply Chain Management Side,
Supply Chain Delivers,
Best Supply Chain Planning,
Supply Chain Definition,
Supply Chain Presentation,
Supply Chain Example,
Managing the Global Supply Chain,
Supply Chain Model,
Providing Supply Chain,
Value Chain,
Just in Time,
Logistics,
Essentials of Supply Chain Management,
Maximizing Supply Chain Efficiency,
Supply Chain Visibility,
Global Supply Chain,
Supply Chain Management Process,
Logistics Supply Chain Management,
Definitions of Supply Chain,
Learn More about Supply Chain Management,
Managing Supply Chain Risk,
Supply Chain Management Division,
Supply Chain Execution Solutions,
Supply Chain Excellence,
Supply Chain Guide,
Warehouse Management,
Financial Supply Chain,
Providing Supply Chain Execution,
Supply Chain Logistics.
SOLUTION SNAPSHOT:
- Industry: Retail
- Challenge: How to quickly
get replenishment items to
market, increase inventory
turns, and engage vendors
in the process
- Solution:
- Inovis Actionable
Intelligence
- Partner Performance
Management
BENEFITS:
- Improved partner
performance through
collaboration
- Speedier supply chain with
lower data errors
- Lower inventory levels and
faster sales
The Situation
Big Lots is a $4 billion company and the largest broad-line
closeout retailer in the US, with 1,350 stores across 47
states. Big Lots stocks both "replenishment" products, as
well as closeout merchandise from a variety of sources,
including production overruns, discontinued products
and returns."We have very close relationships with our
vendors as well as our customers. Our customers come
to our stores not with a list or something in mind, but
80% of them come for the excitement of the treasure
hunt and finding an excellent value, and so we try to cater
to those core customers by providing excellent closeout
values every day", says Katy Keane, Big Lots" VP
Transportation Services.
One of its many critical business processes is to efficiently
deliver goods from all vendors to the sales floor, improving
inventory turns and meeting customer demand. Big Lots
manages approximately 3000 loads inbound and
outbound per week, so enhancing their process to
partner with their vendors to make sure that goods move
quickly and efficiently through the supply chain and get on
the shelves as fast as possible is a top priority.
It is hard enough to manage a replenishment supply
chain in a demand-driven economy and Big Lots has the
added challenge of managing the supply chain for their
closeout merchandise. Big Lots has "never outs""you"ll
always find toilet paper, you"ll always find bleach, paper
towels"in their stores. However, the bulk of what they
manage is closeout deals.They could have a vendor call
and say, "I have one hundred truckloads of furniture that
need to move from five warehouses across the country
into your 1350 stores." Big Lots has to figure out how
to get one hundred truckloads in and out of their
distribution centers in a week oftentimes. They often
don"t know where the buy is coming from or when the
closeout is coming.They have to be poised and ready to
manage that merchandise throughout the supply chain
and get it onto the shelves of their stores as quickly and
efficiently as possible.
In the past two years, Big Lots has made huge strides in
improving their supply chain environment and increasing
inventory turns ' the amount of time a product sits in
their hands."We"ve taken our inventory turns from a 2.9
to a 3.5 in just a two-year time frame. We"ve really
learned to understand our business more than we ever
have before, and what we"re leveraging today is just really
efficiencies in our overall supply chain," noted Steve
Conley, Big Lots" Director of IT.They have made it a top
goal to speed up their inventory turns even faster.
The Business Challenge
To improve inventory turns, Big Lots initiated a "Flow-
Through Project" to cross-dock merchandise through
their distribution centers (DCs). They wanted to
eliminate "dwell time" in the supply chain and get the
goods to the stores as fast as possible and on the shelves.
Cross-docking saves money by speeding up inventory
turns and eliminating the need for warehouses to store
merchandise. Merchandise arrives at one side of the DC
and is split up into shipments and is loaded onto trucks
on the other side and immediately sent out to the stores.
One factor in the success of the flow-through initiative is
having floor-ready merchandise that can be expedited
through the supply chain without having to be re-ticketed
or the store associate needing to prep it for sale. Big Lots
wanted to touch the goods as little as possible, so they
wanted to work with the vendor to create the right
product or get it in a format that would go through the
supply chain untouched. They wanted to manage that
flow by pre-allocating the merchandise. Then when the
shipments hit the distribution center, Big Lots could crossdock
them and get the merchandise out to stores
immediately. But success depended on receiving accurate
and timely electronic data interchange (EDI) data from
vendors (including advanced ship notifications, or ASNs).
With timely and accurate ASNs, Big Lots would not have
to open the shipment. The data would arrive ahead of
time and get scanned into the system. When the
shipment arrived, they would already know how many of
each item is in each box on each palette.
Success with this initiative would require a good supplier
management system. Big Lots wanted to partner and
collaborate with their vendors to make sure that the
goods meet their standards and get to the store shelf as
quickly and efficiently as possible. They were not
interested in relying on a chargeback program that simply
punishes vendors for non-compliance. They wanted to
collaborate and share data with their vendors to drill
down to the root cause of issues and improve
performance. When vendors consistently meet Big Lots"
standards, the vendor will become flow-through eligible
and Big Lots will be able to buy less goods, have faster
inventory turn, and the merchandise will be available to
the customer more quickly.
The Solution
Big Lots chose Inovis Partner Performance Management
to manage their vendors. Big Lots will use this on-demand
solution to certify vendors to deliver ASNs, monitor the
flow of vendor transactions, automate vendor compliance
and deductions and remediate poor performing partners.
Big Lots wanted to create a very flexible vendor
partnership collaboration process with a system to
support that. They wanted custom reporting and 24x7
availability online, and most importantly, they wanted a
real-time information feed for both themselves, and to be
able to be fed downstream to their vendors to remediate
any issues that would prevent the product from getting
from the vendor to the store shelf. Inovis offered that
solution in a robust package, and Big Lots now has realtime
vendor scorecarding availability.They have developed
a website where vendors can log on and see their
performance every single day, or pull performance data
for the last six months or for the week.They can see it in
graphic format; they can see their top five issues; they can
drill down into each specific issue; they can request
additional information from Big Lots.Vendors can interact
with Big Lots through the system and all documentation
and conversations and e-mails back and forth are
captured historically for a particular issue.
"The scorecarding was superior in many ways, as is the
ability to drill down into real live data online. If one of the
main issues a vendor is having is on-time deliveries, they
will see a pie chart, "On-time deliveries are 75% of your
issue", and they can click into that and drill down to all of
the individual issues and purchase orders and events; they
can find out if it"s coming out of one DC of theirs or all
of them, or if it"s a constant problem. So Inovis really
offered a lot more flexibility from that than the other
competitors," added Katy Keane.
From a technical standpoint, Big Lots had created their
own enterprise service bus architecture (ESB) in an effort
to create a state-of-the-art integration framework which
connected their inside systems and allows them to easily
add functionality. One of the reasons they chose Inovis
was Inovis" service oriented architecture (SOA) which
compliments the ESB. Inovis" SOA allows Big Lots to
connect easily and was integrated into their ESB with
minimal impact.
The Results
The solution enables Big Lots and vendors to share data,
lower data errors and jointly improve the supply chain.
Customers get earlier access to goods, certified vendors
get faster flow-through with less auditing, and Big Lots
gets lower inventory levels and faster sales.
About Inovis
Inovis is a leading provider of on-demand Business
Community Management solutions that empower
companies to transact, collaborate and optimize
communications with their entire trading community. By
standardizing and automating mission-critical business
interactions, companies can dramatically reduce the
complexity and cost of supply chain communication. This
foundation of high-quality, reliable and secure connectivity
provides real-time visibility across the order-to-payment
lifecycle.The resulting actionable intelligence enables users
to proactively address supply chain issues before they
impact profitability, shortening cycle times, improving
productivity and increasing customer satisfaction.
With more than 20 years of expertise, Inovis delivers its
products and services to more than 20,000 companies over
a wide range of industries and markets across the globe.