Logistics Management - October 2011

®®EditoriAL STAffMichael A. LevansGroup Editorial DirectorFrancis J. Quinn® ®Editorial AdvisorPatrick BurnsonExecutive EditorSarah E. PetrieManaging EditorJeff BermanGroup News EditorJohn KerrContributing Editor, Global LogisticsBridget McCreaContributing Editor, TechnologyMaida NapolitanoContributing Editor, Warehousing & DCJohn D. SchulzContributing Editor, TransportationMike RoachCreative DirectorWendy DelCampoArt DirectorColumniSTSDerik AndreoliOil + FuelElizabeth BaatzPrice TrendsMark PearsonExcellencePeter MoorePricingJohn A. GentleSage Advicepeerless media, llcA Division of EH Publishing, Inc.Kenneth MoyesPresident and CEOEH Publishing, Inc.Brian CeraoloPublisher and ExecutiveVice PresidentEditoriAL OffiCE111 Speen Street, Suite 200Framingham, MA 01701-2000Phone: 1-800-375-8015MAGAzine SuBSCriptioNSStart, renew or update your magazinesubscription at www.logisticsmgmt.com/subscribe.Contact customer service at:Web: www.logisticsmgmt.com/subscribeEmail: logisticsmgmtsubs@ehpub.comPhone: 1-800-598-6067Mail:Peerless MediaP.O. Box 1496Framingham, MA 01701eNewsletter SuBSCriptioNSSign up or manage your FREEeNewsletter subscriptions atwww.logisticsmgmt.com/enewsletters.RepriNTSFor information about reprints, visit usat www.logisticsmgmt.com/info/reprints.one of the most satisfying resultsof any management decision is whenthe benefits not only exceed yourdepartmental expectations, but alsounexpectedly flow to other parts of theorganization—thus creating operationalimprovements across the board.While this may sound like the introductionto the latest best-selling managementbook, this is just what unfolded forthe supply chain team at Stein Mart—afashion retailer with 260 stores and $1.2billion in sales in 2010—when it reengineeredits transportation operationsover the course of the past two years.Prior to 2009, Stein Mart had beenhaving some success in shippingproduct directly, andquickly, from its vendors toits network of stores via smallparcel carriers. But whilethose carriers where doing acommendable job, the retailerwas bumping into issueswith packaging requirementscompliance and floor-ready guidelines,freight visibility was limited, and storedelivery times didn’t always mesh withstore hours.“It was getting expensive,” GreggSayers, director of supply chain transportationtells our John Schulz in thismonth’s cover story (page 24). “Therewere expenses at the stores to get merchandiseready to sell; and there werealso problems with managing the receiptof our product and the ability to reconcileanything that was not in compliance.”Newly appointed Vice President ofSupply Chain Rick Schart reviewed thesituation with Sayers and Bill Stover,his two new recruits at the time, andthe team went to work to re-organizethe retailer’s transportation operations.First, the parcel carriers were replacedwith a network of LTL and TL carriers,creating dedicated and pool transportationlanes. Then the team spent sixmonths educating vendors on the newprocess just to get the ball rolling.Beyond the expected benefits of thenew transportation process, the teamStein Mart provespower of innovationstarted to see considerable labor savingsat the storefront because managerscould staff accordingly now that theyknew when freight would arrive. Meanwhile,improved communication withvendors had merchandise ticketed andfloor ready, thus cutting more time andexpense once on the store floor.According to the team, the overallcost savings is now rolling in at about$20 million annually. “It came down tohaving the right team in place, the rightcarrier and 3PL partners, and havingthe Stein Mart organization, especiallyIT, aligned to support the new concept,”says Schart.The team started to see considerable laborsavings at the storefront because managerscould staff accordingly now that they knewwhen freight would arrive.This dramatic example of how a supplychain re-design can improve overalloperations has earned Stein Mart the2011 NASSTRAC Shipper of the YearAward, the highest honor bestowedupon the council’s membership andawarded in partnership with LogisticsManagement.According to NASSTRAC ExecutiveDirector Brian Everett: “SteinMart’s innovative approach epitomizesthe transportation and supply chainbest practices that we encourage inour industry.” And once you read thismonth’s inspiring cover story, you’llfind it tough to disagree with Everett’ssentiments.Michael A. Levans, Group Editorial DirectorComments? E-mail me atmlevans@ehpub.comOctober 2011 | WWW.LOGISTICSMGMT.COM Logistics MANAGEMENT 9