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Two world famous brands partner-up with Loscam looking for efficiencies.

2017-11-16

Walmart is a world famous brand in the retail chain enterprise, which entered China 20 years ago in 1996. In development since then Walmart has established brands under the group which include Supercenter, Sam’s Club and Online Sam’s Club.

Yihai Kerry Investment Company is a leading produce and food company, the largest manufacturer in China of seed oil pressing, cooking oil, small packing oil, special fat, chemical fat product, rice & noodles.

Walmart and Yihai constantly pursue supply chain efficiencies and cost enhancements in a long term partnership process. To achieve such objectives, pallet standardization along upstream and downstream supply chains plays the key. Palletised delivery brings benefits including increased loading efficiency, reduced product damage, increased warehouse utilization and truck turnover, reduced costs, manpower and warehouse rental - it also acts as a strategy for bringing synergy to forecasting, planning and stock replenishment.

The problem

Prior to adopting palletised delivery, the Yihai Guangzhou factory was using self-purchased pallets for delivery of products to its distribution centre. Upon arrival, the products would be separated and used in bulk cargo transportation to the Walmart Guangzhou Distribution Centre. These stocks would then be allotted according to retail store, then finally transported out. 

For Yihai, this process lengthened the delivery time, increased the chances of product damage through numerous loads and unloads, and raised labour costs. For Walmart, the low efficiency of human maneuver occupied the loading bay for far too much time.

The solution

Loscam designed a palletised delivery solution, based on the pallet pooling system. The main highlights are:

  • By setting up 2 individual accounts, Yihai Kerry and Walmart can issue and dehire based on the operational needs. Pallet rental fee and liability will be transferred from Yihai to Walmart once the palletised delivery arrives.
  • Pallet standardization is the primary condition for palletised delivery. Yihai hire Loscam ECR pallets to replace its own self-purchased, non-standard pallets.
  • Different product packing or grouping combinations were adopted to reduce the duplicated sorting and labelling operation at the later stage of the supply chain, increasing the speed of the product movement, reducing product damage, and guaranteeing no second human maneuver was necessary when products left Yihai destined for Walmart retail stores. Smaller quantity orders are packed by retail, while larger quantities are packed by regions, with stable stock directly transported out in full pallets.
  • Under the palletised model, the cross docking information Walmart gives to Yihai is based on retail stores and the regions’ order details. Stable stock orders are based on previously agreed TIHI standards, and are ordered by the multiples of pallet, which avoids unnecessary unpacking of the pallet stock or having to increase the height of the load later down the supply chain.
  • In order to enable Walmart to prepare the loading bay and passage based on ASN, crosscheck order details and print out labels to speed up receipt, Yihai sends Walmart an advance packing list by email, including information such as truck model, forecasted arrival time, order number and packing details.
  • When receiving the stock, Walmart prepares the Green Passage for Yihai, and can arrange advance loading while at the same time arranging a forklift to unload. This adopts the practice of “honest receiving”, meaning only a small quantity of products are examined, in order to speed up the loading and truck moving time, saving human unloading costs.

The result

Under the palletised delivery system, inefficient human maneuver is dramatically reduced. The supply chain efficiency is enhanced and costs are lowered, plus possible damage during product flow is decreased.

In this project, palletised delivery reduces product maneuver by 50% along the supply chain process.

 

 

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