Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many...
Transcript of Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many...
Supply Chain
Updated February 2017
© 2014 Lowe’s. All rights reserved.
CONFIDENTIAL, intended for internal distribution only.
New Vendor Information
Lowe's Companies, Inc. | Confidential
Maintained by SC Projects Team
Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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New Vendor Onboarding
What is Logistics?
The detailed coordination of a complex operation involving many people, facilities, and
supplies.
Here at Lowe’s our logistics are very complex given that we are the:
• 8th largest US retailer
• 5th largest importer into the US
• 21st largest retailer in the world
• Ranked 50th on the Fortune 500 list
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Supply Chain Team Structure
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Supply Chain Materials
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Supply Chain Documents can be found by logging into you Loweslink account and
selecting the Supply Chain Information section.
Supply Chain Materials
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Once you have selected the Supply Chain Information page, you will find documents split into the following sections.
Additional information about each of the topics throughout the presentation can be found in the Supply Chain Information page.
Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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New Vendor Onboarding
Vendor Data
• Information Used Includes:
– Dimensions
– Weights
– Quantities
– Minimum Order Multiple
– Lead Time
• Data Used to:
– Run channel analysis
– Cube out trucks (weight vs.
volume)
– Ensure accurate ordering
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It is extremely important that the correct information is provided
during the Item Setup Process
• Lowe’s Replenishment System builds Truckload Volume orders in accordance with
cubic volume (“cube”) and/or weight-based constraints.
– Lowe’s Maximum Weight (Maximum per Shipment is 44,000 lbs)
– Cubic Volume (Lowe’s goal is 3000 cube per trailer)
Cube and Weight Based Constraints
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Impact of Incorrect Item Dimensions
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Incorrect sample item - 33 x 33 x 33
– 1 inch difference per side
– 114 items per truckload (57 less)
– 2,371 cube per truckload (872 less)
– Assuming $1,500/TL = $13.16/unit
freight ($4.39 more)
Correct sample item - 32 x 32 x 32
– 171 items per truckload (TL)
– 3,243 cube per truckload (TL)
– Assuming $1,500/TL = $8.77/unit
freight
Lowe’s calculates margin based on landed
cost which includes freight. In this example,
Lowe’s is losing $4.39 in margin per item
due to invalid dimension data.
Impact of Incorrect Item Dimensions
• Inaccurate dimensional data can result in
incorrectly setting up an item in the DC
network.
• Failure to correctly communicate packaging
and dimensional changes can lead to larger
issues
• Accurate pallet data is needed to ensure
efficient shipping & handling.
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Impact of Incorrect Supply Chain Data
Improper Barcodes can Result in:
– Receiving discrepancies
– Imbalance of inventory levels at both DC’s & stores
– Delayed receiving times
– Vendor deductions
Improper Carton Labelling & Packaging can Result in:
– Safety hazards
– Product damage
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Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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New Vendor Onboarding
Distribution Network
15 Regional Distribution Centers (RDC)
15 Flatbed Distribution Centers (FDC)
4 Coastal Holding Centers(CHF)
3 Transload Centers (TDC)
3 Millwork Facilities
1 Consolidation Facility (TRAP)
1 Internet Facility (907)
76 Flexible Fulfillment Locations
And More….
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Supporting 1,700 + Stores
In the United States
Regional Distribution Center (RDC) &
Transload (TDC) Locations
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Distribution Center Visit
Allows vendors to see operations,
receiving, and handling of products
Visits are capped at 8 logistics team
members
Vendors can visit any of 15
Distribution Centers
Contact your Inventory Planner for
additional information
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Stock
• Product is shipped to a Lowe’s RDC and stored in a location in the facility
• When demand exists for the product at the store, it is picked from the storage location
and shipped from the RDC to a Lowe’s store
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Flow Types
Stock Flow RDC
• On Hand
• Safety Stock
Store
The following pages will provide information
about the basic ways that products can
follow through the distribution network.
Flow Types
100% Cross Dock (1XD)
• Product is not stored in a location in the facility. It is ordered based on demand at the store level.
• Upon arrival at the RDC, it is received and then immediately moved via conveyor, forklift, or squeeze clamp truck to the outbound trailer dock door. It is then shipped from the RDC to a Lowe’s store.
Vendor Prepared Cross Dock (VPXD)
• Individual Store Purchase Orders grouped together for shipment in Truckload volume to the Lowe’s RDC that supports those stores.
• VPXD orders are not received at the RDC . Upon arrival at the RDC, orders are immediately processed for shipment to the Lowe’s store
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Cross Dock Flow RDC
• Cross Dock ONLY
• NO Safety Stock
Store
The following pages will provide information
about the basic ways that products can
follow through the distribution network.
Flow Types
Coastal Holding
• Receives product mostly from import vendors.
• Product flows through both the Coastal Holding and RDC facilities
• Product is stored at Coastal Holding until demand exists at the store level.
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Costal Holding Flow Costal Holding
• On Hand
• Cross Dock
RDC
• Cross Dock ONLY
• NO Safety Stock
Store
The following pages will provide information
about the basic ways that products can
follow through the distribution network.
Flow Types
Store Direct Flow
• Some programs that do not flow through a Lowe’s Distribution Center; instead they ship
directly from the vendor to a Lowe’s store based on store demand. This is known as
Store Direct flow.
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Store Direct Flow Store
The following pages will provide information
about the basic ways that products can
follow through the distribution network.
Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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New Vendor Onboarding
Customer Focused Delivery (CFD) Goal:
Deliver perfect product to the stores that is safe and easy to unload:
• Eliminate product damage found on store shelves
• Ensure delivery of product that is safe and easy to unload at stores
• Improve profit margin by eliminating inefficiencies within Supply Chain and/or Store
processes
• Maintain and improve Lowe's brand image
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Sampling Process
• All new and existing items with changes must be sampled by Lowe’s
• Sampling Room will Verify:
– Scanable and Correct Barcodes
– Packaging Dimensions
– Packaging Requirements Met
• Be sure to include the Sample Purchase
Order Placard when shipped.
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Example Packaging Guidelines - RDCs
• Carton size should be optimized for full utilization
• Cartons should be sealed with glue or tape
• Banding is not permitted on conveyable
• Moisture sensitive products require the use of small desiccants made of silica
gel or clay
• Special handling icons are required on cartons with certain attributes
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Palletization Best Practices
• Quality Requirements for Pallets
– Grade A or Grade B standard GMA Hardwood pallets
– Maximum allowable overhang is 1” on either side of 40’ side
– Pallet should be delivered with shrink wrap intact and
wrapped to pallet
– Stock items MUST always be unitized together on a pallet
– Affix the GS1-128 label to the upper right corner on the front
and back of the pallet
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GS1-128
GS1-128
Palletization Best Practices
Acceptable
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Unacceptable
Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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Lowe’s requires the following documentation to be included during each shipment:
• Advanced Ship Notice (ASN)
– ASNs must be sent by vendors at time of shipment
• VICS Bill-of Lading
– The VICS Bill of Lading standard format and documentation may be found on LowesLink®
• Packing Slip
– Lowe’s requires a legible, machine printed packing slip for all Purchase Orders (both Store and RDC shipments).
– If there are multiple Purchase Orders in a shipment, each PO must have a separate packing slip.
Shipping Documents
Securing the Product for Shipping
• Vendors are responsible for properly securing product to travel via any
mode and arrive without damage.
• Vendors are responsible for the cost and application of any load
bracing devices used on TL shipments including:
– Load bars
– Air bags
– Load latches
• Drivers do not carry load bars and are not required to assist
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Transportation – Truckload (TL) Shipments
Exceed 18,000 lbs. OR occupy 20 linear feet of trailer floor space
• Truckload carrier dispatcher schedules pickup appointment window 24-48 hours prior to
the scheduled ship date
• Collect TL shipments will be routed by Lowe’s Transportation
• Vendor Shipment Status (VSS) application:
– Shows the TL carrier linked to specific PO numbers
– Sign up for VSS on LowesLink
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The following pages will provide information
about the basic transportation methods.
Transportation – Less Than Truckload (LTL) Shipments
Less than 18,000 lbs AND less than 20 linear feet of trailer floor space
• Contact carrier at least 24 hours prior to scheduled shipment to schedule pickup
• Follow the Origin-to-Destination routing outlined in the Lowe’s Routing Guide
• Vendor is Liable for:
– Detention fees if PO is not ready to ship on the designated PO Ship Date
– Multiple POs shipping to the same Lowe’s destination on the same day must be combined on ONE Master Bill Of Lading to avoid fines for Failure to Consolidate
• Lowe’s may consolidate Collect LTL shipment with shipments from other vendors
– Do not ship LTL shipments early
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The following pages will provide information
about the basic transportation methods.
Transportation –Parcel Shipments
• Requirements:
– 150 pounds or less per single package or 235 pounds or less per single shipment
– Single shipment does not contain more than 11 parcels
• Use Lowe’s Routing Guide to determine if UPS or FedEx should be used
• Collect parcel shipments:
– Should be tendered to carriers under Freight Terms of “3rd Party Billing”
– New vendors should contact [email protected] to receive Lowe’s 3rd
party billing number
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The following pages will provide information
about the basic transportation methods.
Transportation Routing Matrix
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Utilize the Routing Requirements Manual to find the Routing Matrices. They will provide the correct core carrier to use in each situation. Below is an example of one of the Matrix available.
Transportation
• Please Communicate with Lowe’s team IF:
– Trend occurs on carrier non-compliance
– Load is routed in wrong mode (routed TL when less than 20lft or 18,000lbs)
– Unusually high number of POs shipping on the same day
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Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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Vendor Compliance Policy
• All purchase orders should be shipped complete and arrive at Lowe’s facilities when scheduled
• Vendor’s Should:
– Have shipments ready on the scheduled ship day
– Coordinate with the carrier regarding arrangements for pickup at the facility
– Be proactive, anticipate, and communicate problems before they occur so that solutions can be developed together with Lowe’s
• Poor Vendor performance will result in fines or loss of business
• The Vendor Compliance Policy document will provide additional detail and examples
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Vendor Compliance Metrics
• 98% Threshold:
– On-Time Shipping Performance (2 day grace period)
• Freight collect vendors will be based on ship/sail date
• Freight prepaid vendors will be based on arrival date
– Fill Rate: quantity ordered vs. quantity received
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Vendor Compliance Metrics
• 100% Threshold:
– Barcodes: active and legible labels properly placed
– Packaging: properly packaged and Lowe’s approved
– Core Carrier: adherence to Lowe’s core carrier specified routing requirements
– Reset Purchase Orders
– New Store Purchase Orders
– SOS Purchase Orders
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Vendor Compliance Report Cards
On-Time and Fill Rate metrics are only available via Report Cards
• Process Time Line:
– Report Cards are Generated and sent out at the beginning of every month
– Vendors have two weeks after reporting is received to contact the Inventory
Planner (IP) and dispute any issues with performance goals
– Root cause responses will be reviewed and fines will be implemented
• It is the vendor’s responsibility to ensure that they are receiving the report card
– Please contact [email protected]
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Vendor Compliance Report Card – Non-Compliant
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• Each month a Vendor is below 98% compliant:
– the recipients will receive an email which will provide details about how to contest the On-Time and Fill-Rate fines if necessary.
• The report card will include an attachment which provided details about the PO’s with the variances.
Vendor Compliance Report Card – Compliant
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• Each month a Vendor is over 98% compliant:
– The recipients will receive an email providing details about being compliant for the month.
Content
• Supply Chain Overview and Team Structure
• Impact of Vendor Data
• Distribution Network
• Sampling, Packaging and Palletization
• Transportation and Shipping Requirements
• Vendor Compliance Policy
• Vendor Data Options
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Vendor Data Options Can be found in the Following Locations:
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In front of the Firewall: In the Supply Chain Information section:
Vendor Data Options Document
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The Vendor Data Options document will provide a list of Point of Sale (POS) options that are currently available to vendors, as well as additional information about how to apply for access to each option.
Data Options
Vendor DART:– Flexible reporting for POS and Forecasting information
– Number of users per vendor is limited
– Qualification: $8million in annual sales to qualify
DART Lite:– Flat file of basic sales and inventory data
– Qualification: Nursery or Import vendor
Electronic Data Interchange (EDI 852) :– EDI transmission providing basic sales and inventory data
– Qualification: Full EDI Vendor (not a Webform vendor)
3rd Party: – Available to vendors that do not qualify for above options or wish to outsource data
analysis
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General Mailboxes
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