It only takes an instant to snap a family photo—that is, once you assemble the children, uncles, aunts, grandparents, and other assorted relatives. But the time required to move the camera, lens and film—or digital chips—through the supply chain in preparation for that memorable moment is more likely to be measured in weeks or months. Todayís supply chains often stretch half way around the world, reaching deep into the interior of China or remote islands of Indonesia. And getting a sharp picture of such a far-flung network—one in which goods are always in motion—poses a bigger challenge than getting all the relatives to smile at once.
No one knows that better than Ritz Camera, the well known retailer of cameras, lenses and associated products. The photography gear it sells at its 1,100-plus stores nationwide comes from sources both near and far. Managing the international portion of its sprawling supply chain, bringing goods into its U.S. distribution centers for shipment to the stores, requires careful orchestration of the activities of off-shore suppliers, forwarders, ocean carriers and domestic carriers.
And it's not just camera supplies that move through that pipeline. Ritz is the parent of another chain of stores, Boater's World Marine Centers, one of the nation's largest retailers of marine supplies. Its products may be very different from those in the photo supply stores, but the 115-store chain's international sourcing creates similar supply chain challenges.
It's safe to say, then, that when it comes to Ritz Camera's supply chain, something's always in motion. Bob Elton, vice president of Ritz Cameras Inc., which is based in Beltsville, Md., says that stores in both chains are replenished from the companies' DCs at least once a week. The DCs for the Ritz Camera division are located in Suwannee, Ga., and Topeka, Kan. Boater's World also has a DC in Topeka as well as one in Denton, Md. The Topeka DCs occupy the same building, but are separate operations.
Both businesses purchase products in Asia through another operating company, Ray Enterprise Co. Ritz Camera and Boater's World are Ray Enterprise's main customers, but Elton says it also sells to some other clients. Ray Enterprises was established about 30 years ago, Elton explains, and it maintains a separate identity because some of its clients are Ritz's competitors.
The long-range view
As for import volumes, the two chains combined import several hundred container loads of goods each year. "We have about 25 suppliers in the Far East," Elton says. Suppliers are located in Japan, Korea, Hong Kong, China and Taiwan.
The company has also used suppliers in Vietnam and Indonesia. For the Ritz Camera business, photographic lenses make up a large portion of the imports. Items like photo filters, tripods and gadget bags are also sourced in Asia. Boater's World is less dependent on imports than Ritz Camera, sourcing such goods as trailer lights, clothing and accessories like clocks in Asia.
About 80 percent of Ritz's imports are full containers—a combination of 20-footers, 40-footers and 40-foot high-cube containers—with most of the balance moving in less-than-containerload shipments. In Taiwan, Ritz employs an agent who consolidates shipments into full container loads. Ritz also makes use of air freight, flying in one or two shipments, primarily high-end photo equipment, from Japan each month.
Today, virtually all of the ocean-borne imports come through Georgia's Port of Savannah on ships from Asia that are routed through the Panama Canal. That hasn't always been the case, however. Previously, the company used the Port of Long Beach. "Until 2003, we were doing mini-landbridge shipments out of [California]," says Elton. But labor-management disputes and long delays prompted him to shift to Savannah. "It caused tremendous complications when product was delayed 30 days or more," he says. "When our shipments were not handled, we were absorbing charges. Freight disappeared."
Seeing is relieving
Port delays and a lack of visibility into ocean shipments prompted Ritz to make other, more radical changes in its operations as well. Those problems spurred Ritz to switch its international freight operations to a new manager. In hopes of gaining better control and visibility over its imports, Ritz Camera last year contracted with UPS Supply Chain Solutions to manage its international logistics. UPS now takes charge of ocean freight, customs clearance, over-theroad freight and small package services for Ritz. Today, the carrier handles about 90 percent of the company's imports, Elton reports.
Prior to contracting with the UPS division, Ritz had entered into partnerships with three other freight forwarders, all U.S.-based. But changes to Ritz's operations over the years had made those arrangements all but unworkable. "We moved our enterprise DC three times in the last five years," Elton says. "That made things confusing. With a different destination point, we had to shop for different lanes." What the company needed, he decided, was a partner with a broad enough scale to handle shifting requirements but was still price competitive.
For now, at least, the relocations have come to a halt. Elton expects that Ritz Camera's eastern distribution will stay in the Suwannee facility for a while, but he also expects to keep his import business with UPS.
He adds that Ritz has done business with UPS for more than 20 years. Much of the store replenishment is handled by UPS, as are express orders for customers. That long-standing relationship was one reason why UPS won the international business. Yet even with its confidence in UPS's ability to execute, Ritz made the shift to UPS Supply Chain Solutions cautiously, giving the company one lane at a time before handing over the full import operation.
Perhaps the most important factor in Ritz's decision to use UPS Supply Chain Solutions was the information capabilities that it brought to bear.
Like retailers everywhere, Ritz's management wants a complete and accurate accounting of the total landed cost of its goods when they arrive. "With freight [rates running anywhere from] $4,000 to $6,000 per container, that has a strong bearing on final costs," says Elton. And it's not just container shipping costs that must be factored in. The company also needs a full accounting of its other import costs—inland freight, peak season surcharges, demurrage, and so forth—before it can price its goods for sale and ship them out to the stores. Ritz wanted one company that could control shipments from door to door, with full visibility of shipment status and costs.
With some other forwarders, Ritz had to wait three or four days after the shipment arrived before it could get information on charges like demurrage, a delay Ritz could not afford. "UPS was one of the only companies consistent enough to tell us, 'This will be the final pricing structure,'" Elton says. Knowing those costs helps ensure that Ritz prices its imported goods to sell at a profit.
Today, Ritz Camera continues to rely on UPS for much more than just managing its imports. UPS also handles many of its outbound shipments from DCs to retail stores or direct to customers. The company once operated a private fleet, but Elton says it discovered it was more efficient to use common carriers.
Most shipments bound for Ritz Camera's stores are relatively straightforward truck shipments, Elton says, but the freight bound for the Boater's World Stores is a different story. Not only are there more SKUs, but the products are often oversized and pose handling difficulties. "The shipments are 10 times the size," Elton says. Most shipments to the Boater's World Stores are multi-stop truckload shipments, made by truckload carriers under contract to Ritz.
Ritz Camera has stores in 46 states, including Alaska and Hawaii. The Boater's World stores are located primarily in coastal and Great Lakes states. The Topeka DC handles shipments to most stores west of the Mississippi, the Suwannee DC handles shipments to Ritz Camera's stores in the East, and the Denton DC handles shipments to Boater's World stores in the East. To date, Ritz has found that DC network configuration to be the most efficient. "Time in transit is very, very critical for us," Elton says. "That dominates the decision of where we fulfill from."