Subscribe to our free, weekly email newsletter!


NASSTRAC Shipper of the Year: Best Buy meets the multi-channel challenge

By John D. Schulz, Contributing Editor
October 01, 2012

As logistics professionals know, there’s more to the supply chain than simply moving product. An innovative supply chain not only connects retailers to manufacturers and customers, but it can offer ancillary benefits including improved inventory control, lower costs, and even cleaner stores.

A leading example of that is Best Buy, the Richfield, Minn.-based “big box” retailer of electronic goods. Faced with rising transportation costs two years ago, Best Buy set out to change its logistics strategy while remodeling some of its 1,059 U.S. retail locations to offer smaller, more intimate shopping environments with a “cleaner” look.

Two years later, Best Buy has reduced transportation expenses by 30 percent per shipment in the stores that were remodeled. Its new transportation network also provided logistics flexibility and created a template that can be plugged in as more of its locations are converted to the new, multi-channel format.

“By reducing transportation expense and providing flexibility, we’re able to remodel Best Buy stores to our new format more efficiently and effectively,” says Peter Zedler, Best Buy’s senior manager for transportation planning and support. “Over the long term, this will enable Best Buy to remodel more stores to a format we feel better services the customer.”

For this innovative thinking, Zedler and Best Buy have been named NASSTRAC’s 2012 Shipper of the Year—the second time the company has received the award in the past eight years. According to NASSTRAC Executive Director Brian Everett, this is the first time that a company has received the coveted award multiple times. “They truly do some innovative things,” says Everett. “Best Buy’s program demonstrates that a retailer, or any shipper for that matter, now has to think about more than just product movement throughout the supply chain.”

Everett calls Best Buy’s innovation “a classic model of inventory postponement,” leveraged in a unique way. “It’s a great supply chain story,” he says. “By having the fixtures and supplies for the upgrade projects closer to the end user or installer, the last-minute changes done during the store remodeling process are more easily accommodated.”

Zedler and Best Buy’s logistics team has also realized huge savings in expedited shipping costs by deploying retail items to the local warehouse in advance of sale date. “By having goods a few miles away from its stores, versus hundreds of miles in the past, changes are handled nimbly and at a far less cost,” Everett says.

Best Buy’s customers are also winners in this. “Our new store format is really about finding a solution for the customer and not shoving as much product in their face as possible,” says Zedler.

About the Author

image
John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The PMI, the ISM’s index to measure growth, increased 1.8 percent to 57.1 in July. This is 1.8 percent higher than the 12-month average of 55.3. The PMI has grown in 18 of the last 20 months, with economic activity in the manufacturing sector expanding for the last 14 months as the overall economy was up for the 62nd consecutive month.

YRC Worldwide, whose regional and long-haul units provide the second-largest LTL capacity in the trucking industry, narrowed its second-quarter loss to $4.9 million on $1.32 billion revenue, compared with $15.1 million loss on $1.24 billion revenue in the year-ago quarter.

With NFL training camps in full swing, it stands to reason that Congress must be replete with football fans, given how it basically has elected to punt on federal transportation funding yet again, with the Senate yesterday signing off on a ten-month bill to keep federal surface transportation funding intact through May 2015 through a nearly $11 billion stopgap measure.

Carload volumes were up 4.3 percent at 306,988, and intermodal volume for the week ending July 26 was up 3.3 percent at 264,809

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA