For Office Depot, which opens at least 75 new stores and remodels another 75 locations per year, it is imperative that fixtures and displays arrive in time for openings. The Delray Beach, Fla.-based chain keeps everything on track and on schedule with the help of a third-party logistics (3PL) provider.
Office Depot strives to stay on top of a tight construction schedule, but delays are not uncommon when obtaining the correct permits and meeting local and state building requirements. The delivery of fixtures and displays, including gondolas, upright displays, steel beams and wire, can also affect the timing and cost of new-store openings.
“We work in a just-in-time environment, but if freight doesn’t arrive on time, we are paying our installers to sit and wait,” said Elaine Alexander, manager of store fixtures, Office Depot, which operates 1,200 stores nationwide. “We are also up against rising fuel costs, so we need to work with freight companies that will help us get fixtures to stores in the most cost-effective way possible.”
To meet its goals, Office Depot works with a 3PL provider that consolidates and groups together less-than-truckloads (LTL) of similar internal hardware into one trailer.
Office Depot has been managing these deliveries successfully for almost a decade. But processes did not always run so smoothly. Previously, the retailer worked with various freight vendors, some with their own carriers. Scheduling was handled manually on spreadsheets. There was some inconsistency with regard to costs.
To ensure that it kept its transportation costs in line, and separate from fixture costs, the chain searched for a more efficient and cost-effective carrier partner. It wanted a company that could create more efficiencies during the cross-docking process with fixture partners, an operation that can become tedious.
“We reuse many fixtures, but since there are so many pieces, we have many fixture partners,” Alexander said. “Our first requirement was to partner with a company that could consolidate all freight from disparate companies into one truck-load and send it to a dedicated store.”
The ideal partner had to ensure outbound trucks were filled to capacity and that they would arrive in time to meet store-opening deadlines.
“We also wanted a partner that had Web and telephone access to track inbound shipments, as well as representatives who could handle issues both during and after business hours,” Alexander said.
Office Depot’s transportation department organized all bids and the request for proposal (RFP) and chose Transplace, Frisco, Texas, to centrally manage its full truckload shipments.
As Office Depot creates its store-opening schedule, it uses a dedicated Web site to share openings, delivery dates and fixture-installation deadlines with Transplace. The vendor uses this data to procure fixtures and build its loads and shipments.
These plans can shape up six months in advance to a store opening, “which helps us to plan ahead in case of any construction delays,” said George Henry, operations manager, fixtures and displays, Transplace, who reported that the company delivers 99.5% on-time service levels.
The proactive nature of the company has provided Office Depot with value in the form of cost avoidance.
“By having insight into our construction and store-opening data, they find ways to work around our schedules and make sure we meet deadlines regardless of the circumstances,” she said.
On-time service has prompted Office Depot to tap Transplace to manage shipments of kiosks and hardware that will support its new in-store Tech Depot Services, which enables technologically overwhelmed shoppers to use an in-store kiosk to schedule appointments with a tech-support member.