Optimal service begins with bright inventory management

Patrick Verougstraete: The logistics chain has always been one of Cebeo’s strengths. We were already delivering good customer service with the old system. But we stock an increasing number of items and customer expectations are rising. We need a system that meets current demands, and that can evolve to meet future ones.

Sonepar: How are you dealing with the issue?
PV: When we were designing the warehouse, the idea was that we needed to have the greatest possible degree of specialization at the receiving function level. It is critical to have people on the dock who know by heart the products that are shipped to us. But the supplier also has a role to play here, which is why we have explicit agreements with them on how they code and package the items they ship. After merchandise is scanned on the receiving dock, the system tells us whether it is a stock item or no stock and where it should be placed in the store. Bar code scanning eliminates subsequent storage errors. Tracking and tracing apply to the package as well as the individual part: if an error occurs at this point, chances are good it will be passed on through to the end customer. In other words, the better our working relationship with our suppliers, the better our customers are ultimately served.

Sonepar: What is the secret to flexible merchandise flows?
PV: Maintaining the most effective stock management system possible. Our business is ensuring that the right products are in stock, and this requires harmony with our suppliers. In the past, we stocked merchandise that we bought in small quantities three or four times a month. While this meant low storage fees, it also meant that we often had to make multiple deliveries to fill a customer’s order. At the end of the day, this meant higher logistics costs for the suppler, who was filling several small orders; for us, because we were receiving a higher number of shipments; and for our customers, who had to accept delivery several times instead of once. Customer service that includes one-time delivery in full leads to cost savings throughout the supply chain.

Sonepar: How does Cebeo stack up from this perspective?
PV: Considerable effort has been made in this area, which remains our number one concern. We have installed Equazion’s Supply Chain Scanner, which analyzes our processes in order to identify sources of improvement. Questions range from what items we need to stock regularly to what quantities we need to have in stock to increase customer service levels. The real work begins once we have answers to these questions. In addition, our orders have to suit supplier packaging constraints: if an item we stock comes in boxes of 120, it makes no sense to buy in batches of 100. If we ask the supplier to deliver 100, we are making work for him. He has to open the box, count out the desired number, etc. What’s more, the risk of error is much higher. Integration with suppliers is therefore absolutely critical; and this is a daily obsession.

Sonepar: Let’s leave the issue of warehousing for a moment. Merchandise also has to make it from storage to end customer.
PV: And that is obviously the most important trip it makes. The need to track and trace products doesn’t stop when they leave our storage facility. Whereas before we would have said “we delivered five packages,” now we have to also be able to say “in the first package there were x number of items, in the second one there were x number of items,” etc. Every delivery that leaves the center is assigned a personal number, which the shipper scans when the customer receives the package. This means that we are always one hundred percent sure of what has been delivered to the customer and when it was delivered. This gives us a bird’s eye view of the whole process as it unfolds, from merchandise receipt to final delivery.