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Supply Chain Updated February 2017 © 2014 Lowe’s. All rights reserved. CONFIDENTIAL, intended for internal distribution only. New Vendor Information Lowe's Companies, Inc. | Confidential Maintained by SC Projects Team
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Page 1: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Supply Chain

Updated February 2017

© 2014 Lowe’s. All rights reserved.

CONFIDENTIAL, intended for internal distribution only.

New Vendor Information

Lowe's Companies, Inc. | Confidential

Maintained by SC Projects Team

Page 2: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

2

New Vendor Onboarding

Page 3: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

What is Logistics?

The detailed coordination of a complex operation involving many people, facilities, and

supplies.

Here at Lowe’s our logistics are very complex given that we are the:

• 8th largest US retailer

• 5th largest importer into the US

• 21st largest retailer in the world

• Ranked 50th on the Fortune 500 list

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Page 4: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Supply Chain Team Structure

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Page 5: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Supply Chain Materials

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Supply Chain Documents can be found by logging into you Loweslink account and

selecting the Supply Chain Information section.

Page 6: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Supply Chain Materials

6

Once you have selected the Supply Chain Information page, you will find documents split into the following sections.

Additional information about each of the topics throughout the presentation can be found in the Supply Chain Information page.

Page 7: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

7

New Vendor Onboarding

Page 8: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Data

• Information Used Includes:

– Dimensions

– Weights

– Quantities

– Minimum Order Multiple

– Lead Time

• Data Used to:

– Run channel analysis

– Cube out trucks (weight vs.

volume)

– Ensure accurate ordering

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It is extremely important that the correct information is provided

during the Item Setup Process

Page 9: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

• Lowe’s Replenishment System builds Truckload Volume orders in accordance with

cubic volume (“cube”) and/or weight-based constraints.

– Lowe’s Maximum Weight (Maximum per Shipment is 44,000 lbs)

– Cubic Volume (Lowe’s goal is 3000 cube per trailer)

Cube and Weight Based Constraints

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Page 10: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Impact of Incorrect Item Dimensions

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Incorrect sample item - 33 x 33 x 33

– 1 inch difference per side

– 114 items per truckload (57 less)

– 2,371 cube per truckload (872 less)

– Assuming $1,500/TL = $13.16/unit

freight ($4.39 more)

Correct sample item - 32 x 32 x 32

– 171 items per truckload (TL)

– 3,243 cube per truckload (TL)

– Assuming $1,500/TL = $8.77/unit

freight

Lowe’s calculates margin based on landed

cost which includes freight. In this example,

Lowe’s is losing $4.39 in margin per item

due to invalid dimension data.

Page 11: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Impact of Incorrect Item Dimensions

• Inaccurate dimensional data can result in

incorrectly setting up an item in the DC

network.

• Failure to correctly communicate packaging

and dimensional changes can lead to larger

issues

• Accurate pallet data is needed to ensure

efficient shipping & handling.

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Page 12: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Impact of Incorrect Supply Chain Data

Improper Barcodes can Result in:

– Receiving discrepancies

– Imbalance of inventory levels at both DC’s & stores

– Delayed receiving times

– Vendor deductions

Improper Carton Labelling & Packaging can Result in:

– Safety hazards

– Product damage

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Page 13: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

13

New Vendor Onboarding

Page 14: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Distribution Network

15 Regional Distribution Centers (RDC)

15 Flatbed Distribution Centers (FDC)

4 Coastal Holding Centers(CHF)

3 Transload Centers (TDC)

3 Millwork Facilities

1 Consolidation Facility (TRAP)

1 Internet Facility (907)

76 Flexible Fulfillment Locations

And More….

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Supporting 1,700 + Stores

In the United States

Page 15: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Regional Distribution Center (RDC) &

Transload (TDC) Locations

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Page 16: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Distribution Center Visit

Allows vendors to see operations,

receiving, and handling of products

Visits are capped at 8 logistics team

members

Vendors can visit any of 15

Distribution Centers

Contact your Inventory Planner for

additional information

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Page 17: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Stock

• Product is shipped to a Lowe’s RDC and stored in a location in the facility

• When demand exists for the product at the store, it is picked from the storage location

and shipped from the RDC to a Lowe’s store

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Flow Types

Stock Flow RDC

• On Hand

• Safety Stock

Store

The following pages will provide information

about the basic ways that products can

follow through the distribution network.

Page 18: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Flow Types

100% Cross Dock (1XD)

• Product is not stored in a location in the facility. It is ordered based on demand at the store level.

• Upon arrival at the RDC, it is received and then immediately moved via conveyor, forklift, or squeeze clamp truck to the outbound trailer dock door. It is then shipped from the RDC to a Lowe’s store.

Vendor Prepared Cross Dock (VPXD)

• Individual Store Purchase Orders grouped together for shipment in Truckload volume to the Lowe’s RDC that supports those stores.

• VPXD orders are not received at the RDC . Upon arrival at the RDC, orders are immediately processed for shipment to the Lowe’s store

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Cross Dock Flow RDC

• Cross Dock ONLY

• NO Safety Stock

Store

The following pages will provide information

about the basic ways that products can

follow through the distribution network.

Page 19: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Flow Types

Coastal Holding

• Receives product mostly from import vendors.

• Product flows through both the Coastal Holding and RDC facilities

• Product is stored at Coastal Holding until demand exists at the store level.

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Costal Holding Flow Costal Holding

• On Hand

• Cross Dock

RDC

• Cross Dock ONLY

• NO Safety Stock

Store

The following pages will provide information

about the basic ways that products can

follow through the distribution network.

Page 20: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Flow Types

Store Direct Flow

• Some programs that do not flow through a Lowe’s Distribution Center; instead they ship

directly from the vendor to a Lowe’s store based on store demand. This is known as

Store Direct flow.

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Store Direct Flow Store

The following pages will provide information

about the basic ways that products can

follow through the distribution network.

Page 21: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

21

New Vendor Onboarding

Page 22: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Customer Focused Delivery (CFD) Goal:

Deliver perfect product to the stores that is safe and easy to unload:

• Eliminate product damage found on store shelves

• Ensure delivery of product that is safe and easy to unload at stores

• Improve profit margin by eliminating inefficiencies within Supply Chain and/or Store

processes

• Maintain and improve Lowe's brand image

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Page 23: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Sampling Process

• All new and existing items with changes must be sampled by Lowe’s

• Sampling Room will Verify:

– Scanable and Correct Barcodes

– Packaging Dimensions

– Packaging Requirements Met

• Be sure to include the Sample Purchase

Order Placard when shipped.

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Page 24: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Example Packaging Guidelines - RDCs

• Carton size should be optimized for full utilization

• Cartons should be sealed with glue or tape

• Banding is not permitted on conveyable

• Moisture sensitive products require the use of small desiccants made of silica

gel or clay

• Special handling icons are required on cartons with certain attributes

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Page 25: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Palletization Best Practices

• Quality Requirements for Pallets

– Grade A or Grade B standard GMA Hardwood pallets

– Maximum allowable overhang is 1” on either side of 40’ side

– Pallet should be delivered with shrink wrap intact and

wrapped to pallet

– Stock items MUST always be unitized together on a pallet

– Affix the GS1-128 label to the upper right corner on the front

and back of the pallet

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GS1-128

GS1-128

Page 26: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Palletization Best Practices

Acceptable

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Unacceptable

Page 27: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

27

Page 28: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Lowe’s requires the following documentation to be included during each shipment:

• Advanced Ship Notice (ASN)

– ASNs must be sent by vendors at time of shipment

• VICS Bill-of Lading

– The VICS Bill of Lading standard format and documentation may be found on LowesLink®

• Packing Slip

– Lowe’s requires a legible, machine printed packing slip for all Purchase Orders (both Store and RDC shipments).

– If there are multiple Purchase Orders in a shipment, each PO must have a separate packing slip.

Shipping Documents

Page 29: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Securing the Product for Shipping

• Vendors are responsible for properly securing product to travel via any

mode and arrive without damage.

• Vendors are responsible for the cost and application of any load

bracing devices used on TL shipments including:

– Load bars

– Air bags

– Load latches

• Drivers do not carry load bars and are not required to assist

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Page 30: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Transportation – Truckload (TL) Shipments

Exceed 18,000 lbs. OR occupy 20 linear feet of trailer floor space

• Truckload carrier dispatcher schedules pickup appointment window 24-48 hours prior to

the scheduled ship date

• Collect TL shipments will be routed by Lowe’s Transportation

• Vendor Shipment Status (VSS) application:

– Shows the TL carrier linked to specific PO numbers

– Sign up for VSS on LowesLink

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The following pages will provide information

about the basic transportation methods.

Page 31: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Transportation – Less Than Truckload (LTL) Shipments

Less than 18,000 lbs AND less than 20 linear feet of trailer floor space

• Contact carrier at least 24 hours prior to scheduled shipment to schedule pickup

• Follow the Origin-to-Destination routing outlined in the Lowe’s Routing Guide

• Vendor is Liable for:

– Detention fees if PO is not ready to ship on the designated PO Ship Date

– Multiple POs shipping to the same Lowe’s destination on the same day must be combined on ONE Master Bill Of Lading to avoid fines for Failure to Consolidate

• Lowe’s may consolidate Collect LTL shipment with shipments from other vendors

– Do not ship LTL shipments early

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The following pages will provide information

about the basic transportation methods.

Page 32: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Transportation –Parcel Shipments

• Requirements:

– 150 pounds or less per single package or 235 pounds or less per single shipment

– Single shipment does not contain more than 11 parcels

• Use Lowe’s Routing Guide to determine if UPS or FedEx should be used

• Collect parcel shipments:

– Should be tendered to carriers under Freight Terms of “3rd Party Billing”

– New vendors should contact [email protected] to receive Lowe’s 3rd

party billing number

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The following pages will provide information

about the basic transportation methods.

Page 33: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Transportation Routing Matrix

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Utilize the Routing Requirements Manual to find the Routing Matrices. They will provide the correct core carrier to use in each situation. Below is an example of one of the Matrix available.

Page 34: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Transportation

• Please Communicate with Lowe’s team IF:

– Trend occurs on carrier non-compliance

– Load is routed in wrong mode (routed TL when less than 20lft or 18,000lbs)

– Unusually high number of POs shipping on the same day

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Page 35: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

35

Page 36: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Compliance Policy

• All purchase orders should be shipped complete and arrive at Lowe’s facilities when scheduled

• Vendor’s Should:

– Have shipments ready on the scheduled ship day

– Coordinate with the carrier regarding arrangements for pickup at the facility

– Be proactive, anticipate, and communicate problems before they occur so that solutions can be developed together with Lowe’s

• Poor Vendor performance will result in fines or loss of business

• The Vendor Compliance Policy document will provide additional detail and examples

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Page 37: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Compliance Metrics

• 98% Threshold:

– On-Time Shipping Performance (2 day grace period)

• Freight collect vendors will be based on ship/sail date

• Freight prepaid vendors will be based on arrival date

– Fill Rate: quantity ordered vs. quantity received

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Page 38: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Compliance Metrics

• 100% Threshold:

– Barcodes: active and legible labels properly placed

– Packaging: properly packaged and Lowe’s approved

– Core Carrier: adherence to Lowe’s core carrier specified routing requirements

– Reset Purchase Orders

– New Store Purchase Orders

– SOS Purchase Orders

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Page 39: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Compliance Report Cards

On-Time and Fill Rate metrics are only available via Report Cards

• Process Time Line:

– Report Cards are Generated and sent out at the beginning of every month

– Vendors have two weeks after reporting is received to contact the Inventory

Planner (IP) and dispute any issues with performance goals

– Root cause responses will be reviewed and fines will be implemented

• It is the vendor’s responsibility to ensure that they are receiving the report card

– Please contact [email protected]

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Page 40: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Compliance Report Card – Non-Compliant

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• Each month a Vendor is below 98% compliant:

– the recipients will receive an email which will provide details about how to contest the On-Time and Fill-Rate fines if necessary.

• The report card will include an attachment which provided details about the PO’s with the variances.

Page 41: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Compliance Report Card – Compliant

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• Each month a Vendor is over 98% compliant:

– The recipients will receive an email providing details about being compliant for the month.

Page 42: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Content

• Supply Chain Overview and Team Structure

• Impact of Vendor Data

• Distribution Network

• Sampling, Packaging and Palletization

• Transportation and Shipping Requirements

• Vendor Compliance Policy

• Vendor Data Options

42

Page 43: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Data Options Can be found in the Following Locations:

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In front of the Firewall: In the Supply Chain Information section:

Page 44: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Vendor Data Options Document

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The Vendor Data Options document will provide a list of Point of Sale (POS) options that are currently available to vendors, as well as additional information about how to apply for access to each option.

Page 45: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

Data Options

Vendor DART:– Flexible reporting for POS and Forecasting information

– Number of users per vendor is limited

– Qualification: $8million in annual sales to qualify

DART Lite:– Flat file of basic sales and inventory data

– Qualification: Nursery or Import vendor

Electronic Data Interchange (EDI 852) :– EDI transmission providing basic sales and inventory data

– Qualification: Full EDI Vendor (not a Webform vendor)

3rd Party: – Available to vendors that do not qualify for above options or wish to outsource data

analysis

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Page 46: Supply Chain - LowesLink€¦ · The detailed coordination of a complex operation involving many people, facilities, and supplies. Here at Lowe’s our logistics are very complex

General Mailboxes

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