"The only significant part we didn't develop ourselves is the warehouse management system, which comes from EXE Technologies. It's a fairly common system in the grocery distribution world. We picked it because it handles the sheer volume of product we deal with."
MDV's accounting system is very different from the retail one,due to the nature of its contracts with DeCA and the manufacturers.
"We buy and pay for inventory from the manufacturer. Then, as the stores order product, every 15 days or 26 times a year we need to go through an invoicing process called a roll-up, where we bill the manufacturer for the product sold and ordered during that period, so we're then reimbursed for the inventory and our fee." Poore explains.
Fees to each manufacturer involve a separate negotiation based on things like volume patterns, product cube, other item characteristics and other handling considerations.
Investing In IT
Among the other IT systems MDV has developed for itself is a Web portal where customers (manufacturers and brokers) can obtain a comprehensive set of data on such issues as order and shipment status, sales history and item velocity and performance against various trendlines, volume history, and inventory levels.
"It's really a data warehouse system where manufacturers can access and retrieve whatever information they need to make appropriate decisions. They can look at inventory to see if it's turning the way it should, to make sure they don't get into an aging situation. Then they would run a promotion or do whatever they need to move product into the stores before it's outdated.
"The portal's been a huge success for us in facilitating the whole flow of information and with it the flow of product," Poore says. It has been in place since 1998.
"We were an early leader in that," Poore observes, "because we saw the opportunity to provide a key service to our customers."
Another investment in the last year, aimed at enhancing service, was installation of Vocollect voice recognition software for order selection. "That's already paid for itself handsomely," says Poore. All other warehouse functions are handled through RF applications, which have been in use at the division for over 10 years.
Describing the division's capabilities, Poore adds, "We're really a full-service distributor. We handle a multitude of products. We do a lot of crossdocking for manufacturers. We also provide some kitting services. We're very much a full-service 3PL operation."
There is one more special feature of the military business, Poore comments, that helps drive the division's performance.
"There is a certain pleasure and sense of accomplishment that you get dealing with this patron, knowing that what you're doing is supporting the folks in the armed services," he says. "We're neighbors with these people. We see them every day and interact with them, and see the benefits they get from the commissary, which are substantial, and we feel a part of that. There's a pride in this, which really does make a difference at the end of the day."