Retail chain Blokker has completely redesigned its supply chain from the Far East in six months. E-mails and Excel sheets have been replaced by an order management platform that makes orders transparent and controllable from the factory in China to the warehouse in Geldermalsen.
Blokker hopes to turn around the disappointing results of recent years with a thorough change of direction. The loss-making group wants to win over consumers again with an omnichannel strategy. From now on, the traditionally purchase-driven organisation will take consumer demand as its starting point.
From purchasing to demand-driven organisation
"Blokker has had a lot of success in the past with a purchasing-driven approach," explains Director Supply Chain Hans Danhof. "Purchasing opportunities and the stocks formed in the warehouse as a result determined the shop offer. However, today's retail landscape with fierce competition from discounters, supermarkets doing more and more non-food and online channels requires a different, smarter way of working." For Blokker, consumer demand is now central. From the sales forecasts linked to this, purchasing starts.
This has consequences for the logistics operation. In the old situation where available stock controlled the shop offer, leaflet production was actually the measure of time to shop shelf. The items were already ready in the warehouse. Now, Blokker first devises the leaflet from the needs of the consumer and then places the orders required for it. This creates a longer planning horizon and makes logistics execution more crucial and at the same time more challenging.
Information exchange via Excel
The challenge applies in particular to the part of the assortment that Blokker has produced in the Far East, around 2,000 out of 6,000 items. These are often products made for Blokker under its own private label. This results in a process involving many different parties and countless documents. In the old situation, all information exchange took place via Excel: from the first contact with the supplier, placing the order and production to the execution of logistics. Import Manager Helle Luijpen: "Blokker had no idea where goods were in the logistics chain. We had zero information. Containers often arrived 'by surprise' at the docks in the port." Therefore, just to have enough, Blokker kept stock of many products for almost a year. "Such a way of working was not scalable into the future," Danhof adds. "We could also only order one item per container. That's fine for high-volume products, but not for, say, a tea strainer."
Order management system and forwarder
The Far East supply chain was therefore completely redesigned. Slim4 from Slimstock was implemented for inventory control from the supplier to the storefront. Blokker selected Flexport as its logistics service provider for the route from the loading port in the Far East to the warehouse in the Netherlands. Star Flow Supply Chain from Yellowstar was chosen as the order management platform for this flow. This platform was linked both to Slimstock, Flexport and via the ERP with the relevant Blokker departments. "We saw this professionalisation of our Far East sourcing as one process," explains Danhof. "Practically, though, it was two different things: Replacing Excel with Yellowstar's order management system and, instead of directing logistics ourselves, putting it in the hands of one end-to-end forwarder. We then digitally tied both parties together. Emails and Excels were thus eliminated."
Every journey in this supply chain starts with an order recommendation from Slimstock in the order management platform. Based on this recommendation, a provisional order for the article is created. This is visible in real time to Blokker's purchasing offices in Hong Kong and Shanghai. The buyers coordinate with the local suppliers. As soon as the purchase order is final, it returns with all documents in Star Flow Supply Chain. The information is immediately accessible to Flexport as well. From loading port to warehouse, the forwarder handles the logistics from its own system. Twenty pre-agreed milestones are automatically fed back to Flexport. Star Flow Supply Chain can thus inform Slimstock again, but also Blokker's warehouse management system for receiving planning, the finance department for invoice processing, et cetera. All parties involved have real-time access to the data necessary for them, so that action can be taken at the right time.
At the other end of the Far East supply chain, Star Flow Supply Chain also oversees the route from the manufacturer to the port of loading. To that end, every order is fully insightful and traceable for Blokker. "On my laptop, I can see in real time at box level what is being scanned in the warehouse in China," says Danhof. "The entire supply chain from the Far East is under my control. The insight is mostly better than with local European orders, whose suppliers often share much less data."
A pricing module in the order management platform gives Blokker insight into the total cost (landed cost) of an item until delivery at the distribution centre. This enables a realistic comparison between production in the Far East with all the extras such as transport costs and import duties versus suppliers from Europe who deliver the articles themselves to Blokker's warehouse.
Intensive process
The implementation of both Star Flow Supply Chain and Flexport at Blokker took six months. A very intensive process, according to Blokker. However, the benefits are immediately apparent. The group says it saves several million euros in working capital. In the past, it had lost huge amounts on demurrage alone. For employees, the work is also more fun, Danhof explains. "Supervising our Far East flows was not a popular job before. It constituted a kind of forensic treasure hunt, with constant digging in Excel for the right information. As a result, turnover in the department was high. Now everyone wants to do this work. Through your screen, you have all the necessary data at your disposal at any time."
