SDI Forum Encourages Communication, Innovation
LAS VEGAS—Logistics and supply-chain executives from a variety of industries gathered to discuss best practices, corporate culture and logistics strategies April 28–30 at the Four Seasons Hotel in Las Vegas for the fifth annual SDI Logistics & Supply Chain Forum.
Speakers included Joel Feldman, chief operating officer of Byer of California; Bill Bellerose, vice president of distribution of Hot Topic; Andrea France, principal of SAP America; Mike McMullan, vice president of global distribution and logistics for Warnaco; Jose Guillermo Zozaya Delano, president of the American Chamber of Commerce Mexico; and Gough Grubbs, senior vice president of distribution for Stage Stores. Attendees included executives from BCBGMaxAzriaGroup, Levi Strauss & Co., LaCoste, Brooks Brothers, Tommy Hilfiger, Loehmann’s, Aeropostale, DSW Shoe Warehouse, Bon Ton and Charlotte Russe.
The two-day event was hosted by SDI Industries, a Pacoima, Calif.–based provider of logistics and distribution-center materials handling. As in past editions, executives came to the conference to share their successes, discuss their challenges, and speculate on the future of logistics and supply chain.
One of the ongoing challenges facing manufacturers is finding ways to shorten the production cycle from manufacturing to delivery, according to Byer of California’s Feldman. “Product is perishable, and speed-to-market is very important,” he said. Compounding the issue are transportation providers that want to slow down because “going slower is more cost-effective and ’green,’” he said.
Another key challenge, according to Feldman, is finding sourcing suppliers that provide cost savings, quality and logistical competency. “The lowest cost might not be from the supplier with the lowest price,” he said.
Hot Topic’s Bellerose gave attendees a peek inside the corporate culture of the music-focused mall retailer. The publicly traded company, which operates 680 mall locations domestically as well as 156 locations of Torrid, a plus-size juniors mall retailer, and Shockhound, an online music download and retail store, has an unusual corporate culture that makes for more productive employees and cost savings. Hot Topic has managed to drop the handling cost per unit from 16 cents to 9 cents. A training center for temps, implementation of labor standards, incentives for employees and employee-recognition programs have all contributed to increasing productivity by approximately 60 percent while cutting 220 jobs through attrition in the last four years. The company has doled out more than $1 million in incentives to employees in the past three years.
Warnaco’s McMullan discussed the company’s changing global distribution strategy. The company—which this year will operate 930 international retail stores, 750 stores in Asia Pacific, 730 shop-in-shops and 586 licensed third-party stores—is in the process of building a new distribution center. The recent earthquake in Chile presented a unique challenge for Warnaco, leveling its six-week-old distribution center there. Luckily, Warnaco was able to recover 70 percent of its product from the rubble, and approximately 64 percent of it was reusable, McMullan said. While big changes and expensive new hardware and facilities have made a difference in Warnaco’s bottom line—racking up approximately $10 million in savings—so have smaller changes. For example, Warnaco’s 525,000-square-foot Irwindale, Calif.–based distribution center has realized savings on expenses by allowing attrition to reduce the facility’s workforce, increasing productivity with higher incentives and using the facility as a distribution-center bypass and cross-dock facility. Another small key change that saves money and increases value is reducing the amount of plastic packaging included with items such as bras.
While social media doesn’t fall within the typical duties of logistics executives, SAP’s France gave a presentation to educate attendees on the advantages and pitfalls for businesses participating in social media. “Three out of four Americans use social technology, and two-thirds of the global Internet population uses social networks,” France said. “Following a brand on Facebook makes consumers more likely to buy from that brand.” France urged executives to educate themselves about social networking and participate in ways that could prove productive for their businesses.
Stage Stores’ Grubbs ended the SDI logistics forum on a positive note, urging executives to challenge the status quo to better their facilities and make the most of their employees. In 2009, Stage Stores smoothed its receipt operations, eliminating the bottle-neck effect that happens when all of the company’s 775 stores in 39 states order goods for delivery on the same week of each month. Spreading deliveries out over the month has saved Stage Stores nearly $5 million and allowed the company to cut down on overtime and temporary employees. Like Warnaco, Stage Stores has also taken steps to reduce vendor packaging. “We’re shipping less air,” Grubbs said. Another money- and time-saving move proved to be working with vendors to package goods by store or by building and assembling pre-packs when appropriate. “We don’t want to touch every piece [of merchandise], and we don’t have to,” he said.
Finally, Grubbs urged logistics executives to work closely with buyers for the greater good of the company. “Logistics can help sales folks do their jobs more efficiently and more profitably,” he said.
