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Food retailer Stop & Shop knows what it takes to win in the brutally competitive grocery business. The Quincy, Mass.-based company has grown from a single corner grocer to a chain of more than 370 stores throughout New England, New York and New Jersey. The company was started in 1914 by the Rabinovitz family under the name Economy Grocery Stores Company in Somerville, Mass. Four years later, family member Sidney Rabb introduced an idea new to retail-the self-service, modern supermarket. His novel idea caught on, allowing the company to rapidly expand its number of stores. In 1946, the company officially became known as Stop & Shop Inc., and sales climbed to $42.5m.
Stop & Shop is now a multibillion-dollar corporation owned by Dutch food giant Ahold. It is also the largest food retailer in New England. Stop & Shop employs 58,000 people in its network of stores, distribution centers, manufacturing plants and offices, which stretch across Massachusetts, Connecticut, New Hampshire, New York, New Jersey and Rhode Island. Ahold also owns other grocery chains in the Eastern U.S., including Giant, Martin's, Tops and Peapod.
Much of Stop & Shop's success over the past 90 years has been attributed to its commitment to offering customers the best selection, quality and value, but today, the challenge is even harder.
In an industry where even good margins are often measured in a few percentage points, supply chain performance is the key to squeezing every penny out of the cost structure to compete with the mass merchandisers. Price and availability have become the name of the game. The need to manage the supply chain from a top-down, exception basis has become paramount. Stock-outs, poorly positioned inventory and low perfect-order fill rates are costing the grocery industry billions of dollars annually, and holding higher levels of inventory is not an acceptable solution.
Because of its growth and need to have better controls over its supply chain, Stop & Shop began looking for a visibility management tool several years ago. The retailer wanted to become more proactive in managing the events that occur when supplying products to its end consumers, the retail stores. They saw a substantial financial savings to be gained by managing their supply chain on a proactive, exception basis, but were having trouble sorting through the overflow of data to get to the information that mattered right then. In some cases, it was taking days to create reports that were obsolete as soon as they were available.
Stop & Shop selected Blue Sky Logistics, based in Coppell, Texas, for its expertise in the food and grocery industry and the depth and breadth of its supply chain products. The retailer recently implemented Blue Sky's Insight, a web-based supply chain dashboard application that allows the end user to reduce unnecessary delays and inefficient use of resources by configuring a set of gauges and alerts that identify areas of the operation that require attention.
The immediate challenge for Stop & Shop was to maximize performance, productivity and utilization at its new distribution center in Freetown, Mass. Success would be measured in how many stores could be served out of that facility, how few times product was handled and how fast trucks could be loaded and moved out to the stores.
"Every client has one key issue that needs to be addressed with better information," says Steve Hensley, president of Blue Sky Logistics. "For Stop & Shop it is currently about helping them optimize the activity within the four walls of the DC."
According to Joe Francis, Stop & Shop's manager of process and systems improvement within the company's supply chain strategy and execution group, the results were immediate and substantial, especially for operational productivity and reporting.
"Thanks to Insight our supervisors and operations managers are able to spend more time actually managing the operation instead of mining for data or waiting until reports could be generated," says Francis. He adds that Insight provides a powerful query capability for capturing the information behind the alerts and can also instantly create Excel, Word or PDF files from the results of those queries.
Of course, good supply chain visibility has to cover more than a single function or operation. Francis says that the Blue Sky implementation fills the need across the extended supply chain by utilizing its powerful framework to layer across multiple applications.
Insight takes the data from Stop & Shop's existing systems, including the warehouse management system, material handling and order processing. It configures the data into a supply chain visibility dashboard designed to provide the exact level of exception-based, critical decision information to each level of management from the top supply chain executive to the warehouse operations manager concerned with inventory fulfillment operations. Each manager tracks critical performance metrics based on a user-defined level of business intelligence.
"It is not about the software," says Hensley. "It is about getting better information so better strategic decisions can be made. In the case of Stop & Shop, it is to achieve perfect order fulfillment."
By using a dashboard to view the current operating conditions of their supply chain, upper management has more free time to devote to strategic decisions instead of waiting until the next day to see how well the operation is performing.
"Having this set of information in front of me at a moment's notice is a calming feeling, and if the gauges or alerts indicate a potential flaw, it allows us to jump into action before the situation becomes a problem," says Jerry Pimental, site manager for Stop & Shop's Freetown distribution center. "Blue Sky has delivered upon their promise by providing us with a true working example of a visibility application that doesn't cost a fortune to implement or see results. We implemented the application almost overnight and have achieved positive results from day one."
Next on the agenda for Stop & Shop will be implementing Insight for its transportation applications and managing several key areas of integration with its distribution center.
"Seeing what Insight can do over our warehouse applications, I have no doubt that we will begin to see great benefit as we deploy the application over our transportation modules," says Pimental. "To use an analogy, you can get up from your living room every ten minutes, walk to your front door and see if there is anyone there, or you can install a doorbell. Insight gives us our doorbell."
With Blue Sky Logistics' dashboard supply chain visibility, Stop & Shop is bridging islands of data in the management of its business, Pimental says.
"We intend to utilize Insight well beyond our warehouse management system," Stop & Shop's Francis says. "From a supply chain viewpoint, Insight helps us gain visibility across our corporate information systems. We envision that Blue Sky's Insight will play a mission-critical role in our business decision process."
Stop & Shop Inc.
Headquarters: Based in Quincy, Mass.
Company History: Stop & Shop was founded in 1914 under the name Economy Grocery Stores Company, in Somerville, Mass. In 1946, the company officially became known as Stop & Shop Inc., and sales climbed to $42.5m. Stop & Shop, now a multibillion-dollar corporation, is a property of Dutch food giant Ahold. The largest food retailer in New England, Stop & Shop employs 58,000 people in its network of stores, distribution centers, manufacturing plants and offices, which stretch across Massachusetts, Connecticut, New Hampshire, New York, New Jersey and Rhode Island.
Claim to Fame: Company history says Stop & Shop was the first to introduce the self-service concept that distinguishes the modern supermarket.
RESOURCE LINK: Blue Sky Logistics, www.blueskylogistics.com
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