Birth-to-Death Product Modeling

Saks tracks merchandise from its suppliers to the shelf

Right product, right place, right time. For retailers in high-fashion apparel these are especially critical elements for success. Savvy retailers keep track of their products via advanced systems for product modeling that track product as it moves from the manufacturer, through the logistics function, to the distribution center, into the store and onto the shelf. And in doing so, they keep their customers satisfied.

Saks Incorporated, with 10 store brands, has implemented a suite of applications enabling full and effecient tracking of its merchandise to its multiple companies. Ronnie Johnson, vice president of distribution and strategic planning at Saks Incorporated, speaks of a strategic plan developed five years ago that led to today's modeling system allowing "birth-to-death" tracking of goods. At the core of Saks' merchandise tracking application is a system from Catalyst International. The system includes EDI ordering, transportation management, warehouse automation, cross-docking, UCC labeling, last-minute distribution to stores, as well as several Web applications. In addition to Catalyst, the system includes products and services from ArcLogix, Lafayette and QRS.

Expanding EDI

EDI purchase orders are sent by Saks to vendors who respond with advance ship notices. Saks requires vendors to communicate electronically, via a Web application, regarding what carton counts they'll ship and when. The vendor also sends an EDI document when shipments are picked up by carriers, as well as an electronic manifest detailing exactly what the shipment contains.

Saks receives another electronic document when the goods are about to be delivered triggering an internal electronic message specifying what's on the truck to facilitate cross-docking at the distribution center (DC). Just last month Saks implemented an acknowledgement, sent by the store to the DC, noting receipt of goods.

A new development in the system is a Web-based application from Catalyst that allows non-EDI-capable vendors to participate in EDI using a PC. "They can receive our purchase orders," Johnson says, "and imitate EDI to create advance ship notices and UCC labels." Johnson emphasizes the importance of bringing smaller vendors into the process by saying, "The smaller, boutique vendors can be critical to a retailer's success, because they help make the retailer unique." This is a sentiment echoed by other Saks executives.

Modeling Benefits

The benefits of the system are substantial. "We went from a cross-docking rate as low as 30 or 40 percent, to a rate as high as 92 to 95 percent on a daily basis," reports Johnson. "This helps us save on the necessary square footage of our DC." In addition, there's no need for the company to check in merchandise and hold it in the DC for several days for processing. The goods come in one door and go out the other almost immediately.

Today, 91 percent of Saks' vendor volumes are tendered via a Web application. The transportation management system allows for truckload building and more dynamic routing. The use of EDI eliminates the need for manual data input and ensures information accuracy. Other benefits include improved communication with vendors and a more consistent flow of merchandise.