SHEBOYGAN, Wis. -- Schultz Sav-O Stores here has reduced the incidence of product shortages by an estimated 25% through closer monitoring of third-party carriers that backhaul products into its distribution center.
Reducing product shortage incidents was one of the goals of the transportation department at Schultz Sav-O this year.
Backhauls represent 70% of the retailer/wholesaler's inbound truckload volume. Schultz Sav-O Stores uses third-party carriers to pick up a variety of products, including orange juice, dog food and cereal, from manufacturers' plants and distribution centers. In general, the carriers are held responsible for shortages and damages to products.
"When we get an invoice from the vendor and we have notations of shortages or damages, we file a claim against the carrier because they initially signed that everything on the load was there and in good condition," said Ellen Eldredge Tate, director of transportation at Schultz Sav-O.
Carriers have expressed frustration, however, with situations where they pick up products at a company and there is a shortage or damage problem every time they are delivered. "This leads to the carrier questioning whether it's worth it to pick up from the vendor. We've had some situations like this that are very frustrating for carriers. Those are the type of problems we get involved in because the carrier is working for us," Eldredge Tate added.
The retailer/wholesaler emphasized the importance of maintaining a rapport with third-party carriers.
"We are going to continue to have equipment shortages and driver shortages, and we really have to develop good relationships with carriers," Eldredge Tate said.
"Otherwise, we're not going to get product into the warehouse in a timely manner and we can't sell to our customers either."
Schultz Sav-O's solution, implemented initially earlier this year, involved checking if the receiving process was correct, if the problem was at the shipper's location or if it was a result of improper paper work or human error, Eldredge Tate said.
"Taking these steps has caused incidences of shortages to significantly decrease, and now vendors are alerted to problems they might have before they occur," she said.
Schultz Sav-O Stores has also begun monitoring carrier performance, including on-time pick up and on-time deliveries.