BCR creates a smarter supply chain and paves the way for long-term growth.
Smart freight and logistics processes can often foster greater efficiency, brand loyalty and business growth. But if managed incorrectly, these same processes can damage customer relationships and threaten a company’s bottom line.
Barbeques Galore was grappling with the consequences of managing its logistics function in-house. The company, which manufactured, imported and distributed barbeques, camping equipment and outdoor furniture across a nationwide retail network, was buckling under a logistics process that failed to comply with customer demand and store-specific promotions. Although the retailer was operating a shipping department that handled imports from China and exports to the United States, it was suffering from missed sales opportunities as a result of a fragmented supply chain.
At the same time, the retailer engaged BCR to provide export full container load (FCL) services between Australia and the US, extending on an import less than a container (LCL) service agreement from Taiwan and Hong Kong. BCR drew on existing relationships with suppliers and carriers to streamline processes and create efficiencies across the supply chain, a factor that optimised revenue while strengthening brand loyalty and trust.
A business partnership built on trust
“The freight and logistics industry often suffers from a lack of trust,” says Rob Hunter, Director of Sales with BCR. “Because we were able to draw on our negotiation powers to drive efficiency across the supply chain, we established our credibility right from the beginning.”
Hunter also said that although the relationship started out small, it soon evolved into a much larger partnership based on mutual trust. “As with all customers, we were
able to draw on our expertise to deliver value and help our customer’s supply chains gain a competitive edge.”
Craig Moore, the retailer”s supply chain manager, says that this trust in BCR was a factor in the decision to cease domestic production and move manufacturing overseas. “We began importing from China and saw big shifts in our business when we started shipping high-quality barbeques and also began importing premium outdoor furniture. BCR was involved in discussions with all our suppliers early in this transition in an effort to fine-tune processes – it was exposed to commercially sensitive information. It takes a lot of trust to ensure that a partner has your back. BCR also suggested that we switch our east to west Australian freight to coastal shipping instead of rail, which reduced our domestic transport costs – proof of the way they know our business and have our best interests at heart.”
Creating real-time visibility and improving data accuracy
BCR was then charged with handling customs clearance and import negotiations for FCL pathways – a process that demanded a sharp understanding of key trade lanes as well as pain points throughout the fulfillment cycle. It resolved this by implementing an IT system that featured real-time shipment tracking along with functionality that allowed the customer to produce commercial invoices, packing declarations and letters of instruction. The new system also boosted data accuracy by improving customs documentation and invoicing processes – removing the costly delays often encountered when working with many Chinese suppliers.
This new system also equipped the retailer with real-time visibility of the fulfilment process, enabling it to detect problems early, integrate various parties and anticipate conflicts well in advance. This capability was heightened with the introduction of a full landed cost report for each shipment based on real-time data – a powerful source of intelligence that provided insights on true costs and cost variations while reducing mistakes down the track.
“BCR’s customised Landed Costing tool brings powerful business benefits. Instead of trying to guess and estimate, we knew what our costs were upfront and saved a lot of time trying to reconcile accounts. This also avoided manual errors,” says Moore.
Towards an agile supply chain
The retailer ceased exportation from Australia to the United States and relocated the majority of its production activity to China – a move that saw import volumes double while creating a major rift between shipping capability and in-store demand. The retailer was also faced with rising seasonal pressures due to fulfillment practices that weren’t designed to scale.
BCR recognised that more value could be added to the retailer?s supply chain with improvements to their warehousing strategy, inventory management and container utilisation. It addressed this by rolling out an offshore warehousing initiative that saw stock manufactured from multiple suppliers in China consolidated in a BCR global network facility in China before being shipped to warehouses across Sydney, Perth, Melbourne and Brisbane.
“Previous to the rollout of the offshore warehousing initiative, stock was being sent directly from each supplier to Australia which meant that containers were not being fully utilised,” says Holger Schaurig, Head of Contract Logistics for BCR. “We solved this issue by consolidating stock into two warehouse facilities in China. We then packed full containers with mixed SKUs from multiple suppliers for forwarding to the Sydney, Perth, Melbourne and Brisbane facilities. In addition to improved warehouse and inventory performance, this initiative reduced the cost of Australian linehaul freight.”
This move improved container utilisation from 80 per cent to 86.3 per cent and cut inter-warehouse movements between facilities. “We were able to reduce stock outs and increase service levels by consolidating offshore which improved container utilisation into our Sydney, Perth, Melbourne and Brisbane warehouses,”says Moore. “We also benefited from a steady replenishment pipeline coming from the BCR global network of warehouses in China.”
Electronic Data Interchange (EDI) integration between BCR’s warehouse management system (WMS) and the retailers enterprise resource planning system (ERP) further improved their supply chain?s performance as the SKUs located in the offshore warehouse appeared as an additional stock point in their system, which meant the retailer could make strategic decisions from where to fulfill shipping orders, either from a domestic or an offshore facility. Thus, they were able to make strategic decisions and adopt an agile approach to their business.
“Getting the right product to the right destination at the right time is key. Improved inventory management processes meant that we could respond a lot quicker to peaks and troughs in the market. In some instances, this reduced the customer lead time from three months to three weeks” says Moore.
In addition, BCR rolled out purchase order management, bringing new efficiency across the shipment-tracking process.
A strategic partnership
Ultimately, BCR helped fast-track the retailer’s growth by introducing freight and logistics processes that were heavily tailored to their customer’s needs. Over time, this delivered exponential value for Barbeques Galore and paved the way for long-term gains.
An Australian specialty retailer and maker of barbecues and outdoor gear, made the leap to outsource its logistics. Partnering with BCR has transformed its supply chain. Consolidations at origin reduce costs and streamline fulfilment. Landed cost reports for each shipment improve cost management and reduce errors. BCR-implemented IT solutions, including an EDI interface with the retailer’s enterprise resource planning (ERP) system, provides end-to-end visibility.
|Company:||Manufacturer, importer and retailer of outdoor furniture and BBQs|
|Industry:||Consumer & Retail|
|Situation:||Outsource logistics to better manage growth|
|Services provided:||Freight forwarding, including import/export and coastal shipping
Customs brokerage & consulting
Off-shore warehousing, consolidation
|Result:||Improved supply chain efficiencies with savings of over $5 million in the face of changes in business and shipping strategies|
|Key innovation:||Single-invoice solutions, customised P.O. Management solutions, customised landed costing tool, carrier and supplier management, intra-Australia coastal shipping|