FORT LAUDERDALE (FNS) -- In a business climate where today's technology could mean tomorrow's returns, retailers are striving to automate distribution and inventory management.
Representatives of Saks Fifth Avenue, Talbots and Stern's discussed their progress on those fronts at the National Retail Federation's Logistics and Inventory Management Conference here recently. Regarding transit time and Quick Response, all three said the benchmark is moving up.
"Quick Response is definitely where we're headed," said Bruce Soderholm, senior vice president at Talbots. "We now have 85 percent of our merchandise on a three-day [replenishment] standard and hope to be on a two-day standard in 1995.
"We are already pre-notifying the stores when shipments will arrive and what inventory they'll be receiving, and we've also begun to track shipments via electronic data interchange," he added.
Russ LoCurto, senior vice president of operations at Saks Fifth Avenue, said the chain is also putting distribution under the microscope. "We're really concerned about everything from the time the carrier has the goods to the time it takes to get them to the selling floor," he said.
Greg Owens, an Andersen Consulting partner who moderated the panel discussion, said that kind of scrutiny could help retailers succeed in a competitive retail marketplace.
"We're nearing the point of retail saturation," Owens said. "Good logistics can provide differentiated service, and a well structured, cost-effective format can also provide value to the shopper."
The changes in replenishment scheduling and tracking are affecting the way retailers allocate space in their distribution centers.
"I see two things happening regarding distribution centers," Saks' LoCurto said. "First, the size of the different components -- processing and receiving areas for instance -- are really changing."
He said Saks' Westchester County, New York, DC, which was designed in 1979, is typical of those built before Quick Response started changing the rules of distribution.
"Now, we're going to need less processing space," LoCurto said. "However, the activity that occurs in inbound/outbound receiving is much greater today than it was back in the '80s. The test is how to reconfigure that space to make it cost-effective."
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