Steve Belardi doesn't relish the idea of playing cop, but he figures he has no choice. Like thousands of other retailers, his company, Sport Chalet Inc.—an upscale retailer of sporting goods with around 30 stores in Southern California and Nevada—often pays a premium to suppliers to prep their swimsuits, baseball bats, ski pants or treadmills for the sales floor. And it's up to Belardi, the company's director of distribution and logistics, to see that they make good on their promises.
In the past, most retailers were satisfied to receive cartons stuffed with merchandise, which their own workers would unpack, tag and prepare for display. But today that's no longer enough. Some retailers demand that clothes arrive on hangers, others insist that items arrive pre-stamped with bar codes suitable for use with the retailer's point-of-sale (POS) system, and some require that goods be delivered with their price tickets already attached. And they're serious about these demands: Suppliers that don't live up to their promises can expect to pay fines.
Sport Chalet, for example, frequently asks suppliers to send their merchandise with the price tags already in place. "Our buyers negotiate specific terms and deals with the suppliers—for example, that they pre-ticket our merchandise with our label," explains Belardi. In those cases, Sport Chalet wants to see that it gets what it paid for. "If they agree to do that and charge us a nickel a piece to do it," says Belardi, "we want to make sure they're doing it."
With 3,000 suppliers providing hundreds of thousands of different SKUs of goods, monitoring the vendors' compliance is no easy task. As recently as a year ago, the company was finding it tough to coordinate information about shipments that arrived without, say, price tickets and translate those lapses into fines. Furthermore, it wasn't unusual for suppliers to challenge their fines and demand evidence to support Sport Chalet's claims. Sometimes it was impossible to pull that information—usually weeks old—out of the chaos of an ongoing DC operation, and Sport Chalet would have to relent.Without a reliable means of data collection, Belardi was in much the same position as a traffic cop trying to enforce speeding laws without a radar gun.
Tighter surveillance
Then came a breakthrough. In May 2003, Sport Chalet bought a new warehouse management system from HighJump Software of Eden Prairie, Minn. Belardi quickly discovered that the software was adaptable to automated vendor compliance monitoring. For the first time, he'd be able to use technology to assist in his surveillance and enforcement efforts.
Before the vendor compliance module went live in September 2003, Sport Chalet's distribution center in Ontario, Calif., relied mainly on visual checks. Workers were told to examine incoming merchandise to make sure that bar codes were included and that the codes weren't smudged or otherwise unreadable. But that method proved unreliable, and problems often surfaced once the goods hit the store floor.
Today, that's changed, Belardi reports. The moment the shipments arrive, receivers in Sport Chalet's DC use scanners to check that the bar codes included with the goods are both readable and in compliance with Sport Chalet's POS system. The data gathered by the receivers are then downloaded to a central computer that feeds the information to accounting.
If the labels are missing or if there's some other problem, the receiver has a choice of four pre-worded comments, bar-code printouts he carries with him that he can swipe to indicate what's wrong. Belardi notes that workers can even create a violation message on the fly if needed. "If there's no packing slip, our dock worker can just go in and create one and then charge the vendor $100. Or if they send us stuff we didn't order and we have to return it, there's a fee [for] that as well," Belardi says. "We're going to try to bill back for [every exception we find]."
Headed off at the pass
And the crime rate these days? It's way down, as you might expect. Increased surveillance has led to tougher enforcement. Belardi reports that chargebacks—fines in the form of money deducted from the supplier's invoice—are up 100 percent, reaching as high as $400,000 to $500,000 a year in total. If that sounds excessive, Belardi begs to differ. "That's nothing," he insists. "Wal-Mart might charge a single vendor half a million dollars in violations."
Though they may have the right to remain silent, suppliers haven't hesitated to voice their complaints."The best reaction is when they call us up and ask us what's wrong with the ticket and ask us to give examples," Belardi says. And the worst reaction? "We get a lot of calls," Belardi says, with a sigh. In fact, Belardi has a guy dealing with complaints from vendors full time. "OK, [it's] not the most pleasant job," he admits. "But when he can solve a problem, he gets satisfaction."
In any case, the new system has gotten the vendors' attention. And, in the long run, Belardi is finding that it helps vendors head problems off before they can occur or address systemic problems that are consistently costing them money. Belardi adds that he's soon going to start taking digital photos of goods that are in violation. The photos will be attached to the chargeback data file, so the vendor has solid visual evidence of its infraction.
As for the fines, Belardi insists they're assessed to encourage compliance, not to provide extra revenue for Sport Chalet. Sport Chalet, he says, is just as anxious as the vendors to see the violation rate plummet. So far, it seems to be working. "When they get a violation, they try their darnedest not to get another one," he reports. "That's at least true with the smaller vendors, who we have more clout with."
That's not to say Belardi won't occasionally budge from his tough-guy stance. Sometimes, in order to smooth things over, he plays good cop and tears up the ticket. "Some vendors add price tickets for us for free, so we're sensitive to that. But the ones who have charged us for it, we make sure they get the violations they deserve." What if there are extenuating circumstances? "It's quite common for a supplier to call and say 'This is our first violation in a month and it's because our machine was down.' Ե Often we'll reverse those charges," Belardi says. "We're not the 500-pound gorilla. We want to have a relationship here and encourage people to work on their problems."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.