DC Velocity - December 2016

additional labor if necessary, Sayers said. It also directs pool drivers to offload the cartons at the exact location inside the store where the retailer wants it, he said.

Because of GNC’s lean store staffing policies, robust data flows are required to support reliable delivery execution within tight time windows, Sayers said. “We couldn’t do pool distribution” without the Descartes system, he added.

Technology has enabled pool distrib-
utors to build additional value and flex-
ibility into what is already a specialized,
though sometimes uniformly practiced,
form of distribution. “Traditionally, a pool
distribution model was a ‘vanilla’ model.
Everyone had basically the same process,”
said Mike Flynn, CEO of Freight Systems
Inc., a Seattle-based pool distributor with
six warehouses and about 100 trucks oper-
ating in the Pacific Northwest and the
Western U.S. “Technology has had a large
impact on what can be done and how it can
be done.”
As is the case with any logistics model,
pool distribution doesn’t work for every-
one. The ideal customer ships 50 or 60
cartons per store and has adequate store
density in each market. The model is prob-
ably ill suited to a retailer without sufficient
store exposure, or with too few shipments.
On the other end, a specialty retailer with,
say, 400 to 500 cartons per store deliv-
ery might be better off with a dedicated
pool-like operation because pool distrib-
utors would rather not have one customer
absorbing a disproportionate amount of
space on any one trailer.

The stakes in physical retail remain huge. Despite e-commerce’s explosive growth, brick-and-mortar still accounts for around 90 percent of total U.S. retail sales. Each specialty retailer has its own e-commerce platform, which augments physical sales in feeding the organizational beast. That said, a company like Amazon.com Inc. is taking no prisoners, and Amazon’s strategy of selling and delivering everything on the planet as quickly and cheaply as possible is only gaining momentum. Pool distribution may not be the next wave of retail delivery.

After all, the wave has been in the water for about 30 years. Still, anything that sharpens a specialty retailer’s competitive edge is probably worth considering.

ered the fastest way to maximize throughput in a pool distribution process. The tractor-trailer is then dispatched to the designated pool distribution point, where the trailer is broken down and the cartons sorted and reloaded for final delivery to the stores.

Gregg Sayers, GNC’s vice president of logistics, declined to quantify the cost savings from the switch to pool distribution but said they “have exceeded our expectations.” Much of the savings came from shedding its private fleet operations, especially the time and expense associated with procuring return loads after deliveries at the pool points, he said.

Sayers had nothing bad to say
about GNC’s private fleet model,
which he said did right by the com-
pany for many years. However,
pool distribution gives GNC “better
throughput from the DC to store,”
Sayers said. “It makes sense eco-
nomically for us.”

SOFTWARE AS THE CATALYST

The catalyst for GNC to make the switch, perhaps unsurprisingly, was technology, specifically the software developed by BearWare. Unlike most specialty retailers, GNC staffs its stores with just one or two employees at any time. Floor staffers are expected to be available for customers, and no store has the luxury of dedicated back-office personnel. Because shipment scanning is not done in-store, GNC relies on the Descartes system to track shipment status from the DC to each store location and to help manage the claims process, Sayers said.

The software provides stores with advance delivery notifications so managers can anticipate staff resources needed to receive and unpack the cartons, and schedule