Giant Eagle cuts lead times and inventory costs with web-based logistics

Giant Eagle, with more than 200 supermarkets and five distribution centers in four states, is cutting delivery lead times with top suppliers from 7-10 days to 2-3 days or less with the help of a web-based logistics system expected to save millions of dollars in inventory costs in a supply chain strategy coordinated by logistics and merchandising managers, Bill Parry, vice president of logistics, tells Internet Retailer. “We’ve identified it’s worth tens of millions of dollars to cut lead times to 2-3 days,” he says.

Giant Eagle went live early last year with the web-based Global Command and Control Center, or GC3, logistics management system from G-Log. Following a 100-day implementation period started last fall, Giant Eagle was able to begin tracking shipments throughout the purchase order and delivery process, including the points when a supplier accepts a purchase order and assigns a carrier, and when products arrive at one of the retailer’s distribution centers.

One of the system’s greatest benefits, Parry says, is to let Giant Eagle work towards operating with smaller inventories of safety stock to assure it has sufficient products on hand in case of unexpected supply chain problems, such as shipments that arrived late or in smaller-than-expected quantities. Up until now, holding several days of safety stock on hand was necessary because word of such problems might take days to reach Giant Eagle headquarters through a series of phone and fax messages, and managers often would not be able to re-schedule a delivery in time to avoid a stock-out, Parry says.

Under the G-Log system, vendors and carriers enter information about shipments at several points along the supply chain onto a web page in the GC3 application, providing Giant Eagle managers with real-time visibility into shipment status, including scheduling and quantities. Now, if they see a disruption in supply, Giant Eagle managers can immediately schedule a subsequent delivery day sooner than in the past, Parry says. He adds that new strategy is based on tight coordination between Giant Eagle`s logistics managers and its Merchandising Group, with both groups benefit from the visibility provided by GC3.

Parry notes that suppliers and carriers have been cooperative in participating with the GC3 application, which takes a couple hours of training to learn how to use the web-based data-entry form. In some cases, carriers have portable web-access devices on-board trucks, though some drivers will call in shipment status to a home office for entry into the GC3 system. But getting 100% participation is difficult, because vendors frequently break in new carriers, he adds.