DC Velocity - June 2011

trucker gains by having more freight to transport. In addition, service levels increase because the supply chain is effectively sped up, Grubbs said.

Stage has already signed up two retailers, the names of which Grubbs wouldn’t disclose. A third was expected to come on board by the end of May, and talks were ongoing with six more retailers, he said.

The agreement and others like it herald
a new era in supply chain cooperation,
Grubbs said. Today’s mantra is “we com-
pete on the shelf and collaborate in the
supply chain,” he said, adding that the
company “welcomes any inquiries from
companies who believe their circum-
stances fit this model.”
At the heart of Stage’s strategy is to cre-
ate as many truckload shipments as possi-
ble and reduce its reliance on less-than-
truckload (LTL) or small-parcel service,
where the shipping costs can be up to 40
percent greater. Grubbs estimates that
about 90 percent of Stage’s annual
inbound deliveries of 9 million cartons
now move in truckload service, up from
about 70 percent four to five years ago.

GOING FOR FULL LOADS

Converting freight from LTL to less-costly truckload service is also the end goal of The Home Depot Inc.’s five-year supply chain transformation plan, which is now nearing completion. The Atlanta-based home improvement giant has created 19 “rapid deployment centers” (RDCs), which are flow-through facilities that, as with Stage’s plan, enable the cross-docking of large quantities of merchandise.

By leveraging the RDCs, suppliers who used to ship direct to stores using LTL service can now consolidate their shipments into truckload quantities for shipping to the facilities.

Mark Holifield, Home Depot’s senior vice president, supply chain, said the company should realize 40 basis points— roughly 0.4 of 1 percent—of profit margin improvement largely through the savings in converting LTL to truckload. Given the company’s $55 billion in annual sales, that level of margin expansion is significant, Holifield said.

In addition, Home Depot is looking to share capacity with other retailers on its

dedicated contract carrier network,
according to Michelle D.
Livingstone, the company’s vice
president, supply chain-transporta-
tion. Under the dedicated concept, a
shipper commits to a multi-year
contract where it tenders a certain
amount of volume and pays for
transportation on a round-trip basis.
In return, the shipper gets pre-
dictable capacity and pricing, no
small matter in the current volatile
environment.

RELIABILITY

PUT THE POWER OF PLUS TO WORK FOR YOU.

PLUG & PRINT PRODUCTIVITY GREEN EASE OF USE CHOICES

It all adds up with the new 6600 family. There are dozens of innovative pluses that will
boost your productivity and improve total cost of ownership.
See how the Power of Plus will work for you.