Customer Description:
Customer operates 6,923 retail drugstores in 41 states and the District of Columbia. Existing stores range in size from approximately 8,000 to 25,000 square feet, although most new stores range in size from approximately 10,000 to 13,000 square feet.
Customer’s Issue:
Our customer faced the challenge of integrating 2200 recently acquired stores into their corporate family within 18 months. The customer questioned whether they should increase their fixed cost by adding a temporary warehouse and the personnel to complete the 18-month job, or if they should outsource the project. As the customer stated, “Opening and closing warehouses costs money, affects people, and drains management focus.”
Solutions Overview:
Store Opening Solutions was able to offer the customer flexible warehouse space and the ability to consolidate large fixture programs along with an online system that would enable SOS and the customer to manage the reset program. To simplify the process, store fixtures were loaded on trucks so that the fixtures unload in sequence as needed for installation.
Improvements realized:
SOS allowed the customer to remodel 40-50 stores per week with no late deliveries. Before using SOS, it may have taken two to three weeks to receive a replacement fixture in the store. Now the customer receives new fixtures within days of placing the order online.
Using a third party for technology, consolidation and logistics support has allowed the customer to convert many fixed expenses into variable expenses. This has not only reduced their risk exposure, but also generated bottom-line savings.
As a result, the customer decided to close down their remaining fixture warehouse and allow SOS to manage all of their consolidations, fixture replenishment and point-of-purchase display programs.
Case Study #2
Store Opening Solutions Reduces
Time to Open Store
Customer Description:
The specialty retail operations of the customer consists of retail stores selling a wide variety of furniture, wicker, decorative home furnishings, dining and kitchen goods, epicurean products, bath and bedding accessories, candles and other specialty items for the home.
Customer’s Issue:
The chain has tried all options over the years, from warehousing and transporting fixtures itself to using temporary local warehouses. Under the latter plan, vendors drop-shipped the equipment directly to the warehouse starting about four to five weeks before occupancy. The system worked well in some locations, but the overall accountability was poor.
The frantic phone calls from the customer’s field staff on occupancy days about missing fixtures, damaged fixtures and the like were a problem. Headquarters personnel spent a large amount of time expediting, tracing and reshipping orders.
Solutions Overview:
The customer now issues blanket purchase orders to its fixture vendors that cover six months to a year's worth of its fixtures needs. Store Opening Solutions allocates the needed amount of space in its warehouse, along with dedicated staff. SOS takes full responsibility for the inventory. If something is delivered damaged, SOS completes the freight claims on behalf of the chain. When it comes time to replenish inventory, SOS coordinates with the customer’s vendors to consolidate shipments, resulting in full truckloads.
Improvements realized:
By utilizing the services offered by Store Opening Solutions, the savings resulted in about $5,000 in hard costs per store opening in addition to soft costs.
Using a SOS has the customer’s store-opening costs, as well, minimizing warehouse and transportation overhead and the assorted costs, including emergency overnight air shipments, associated with late deliveries. The fixtures arrive on time, and with every piece accounted for. The estimated the overall annual savings were close to $1 million that goes straight to the bottom line.
In addition the time spent making phone calls, expediting, tracing and reshipping have all been reduced.
