Customer Need/Problem

Two major department stores were pursuing aggressive strategies designed to both continually improve the performance of their supply operations, and to reduce their logistics costs through more efficient operation and reduction of non value-adding cost areas.  Within these overall strategies, three critical areas of focus emerged:

• Preparation of container loads from Asia that can be more readily moved to, and unloaded, at selected retail locations, bypassing costly distribution centre operations.
• Greater control over Asia vendors to ensure required availability and condition of product.
• Visibility of import shipments from purchase order issuance to destination port availability.

Service Solution

OOCL Logistics has a multi-faceted program in place that meets the needs of both companies.  Key program elements include:

• Use of Garment on Hanger (GOH) shipment preparations (vs. in carton flat-pack) to a) enhance container utilisation, b) provide more “store-ready” garment shipments, and c) reduce handling and packaging costs.
• Customised load planning that builds loads in the precise quantities and loading sequences to be quickly and efficiently unloaded and placed within specific retail and/or distribution centre locations.
• A vendor management program that includes: a) educational programs designed to fully acquaint Asian vendors with the two stores’ products, packaging, and shipment preparation requirements, b) inspection of packaging and cartons tendered to OOCL Logistics for consolidation and shipment, and c) acting as the consignee’s agent for assessment and collection of penalties (fines) to vendors who do not provide full container loads (when required) that do not meet minimal loadability standards.
• Use of the OOCL Logistics PODIUM® information system to electronically receive purchase orders, trace purchase order movement and support generations of management reports.

Customer Benefits

• Reduction in distribution centre operations (from 15 locations down to 5) due to custom load preparation in Asia.
• Improved container utilisation (from 26 CBM to 30 CBM/TEU) due to stronger vendor loading control and OOCL Logistics consolidation expertise.
• Reduced administrative costs as OOCL Logistics fully coordinates and manages Far East shipment preparation and monitors shipment progress through its information systems.
• Reduced unloading and merchandise placement costs at destination.