The advance ship notice (ASN) is essentially an electronic communication from a vendor or supplier to its customer advising them that a shipment has been created against a purchase order (P.O.) with specific item(s) and quantities. At shipment level, an ASN can provide basic information about the order. More advanced ASNs can offer detailed information via case/pallet level license plate identification, which can be imbedded to include data elements such as end customer/ store, lot numbers, expiration dates, catch weight and even country of origin/ pedigree information. This visibility can be extremely valuable and provides the key to unlock the handcuffs on your supply chain. In order to fully under- stand the power of the ASN, let’s take a look back.
Many retailers have been utilizing ASNs and ASN compliance with their vendors for more than 20 years and they have come to fully appreciate their value. For example, a large department store will require an apparel supplier to do a “ship to/mark for”, meaning that the ASN label on that carton already earmarks the contents for a specific store location. Once it arrives at the distribution center that carton will be cross-docked directly to the targeted store without being opened, reducing handling and transit time to the selling floor. Another method is for the cartons to be pre-packed with an assortment that is defined at the ASN level. These cartons are then scanned at receipt and systemically directed to an associated store location thus eliminating the need to put-away, replenish and pick the products, reducing labor and increasing the speed of processing.
However, grocery retailers have been slow to adopt detail level ASNs. It could be due to the typical “pull” environment where the store locations order the required inventory, which creates the store order that is provided to the operations of the grocery DC, versus the “push” environment of other retailers where POS feeds a replenishment system that creates the orders. So it may seem on the surface that ASNs and flow-through distribution won’t work in the grocery supply chain.
But some supermarket chains are seeing the light. For example, one Manhattan Associates customer, Giant Eagle, employs ASNs with Manhattan’s Warehouse and Distribution Management solutions, utilizing “put to store” functionality for virtually all their fresh items. With those vendor supplied ASNs, they’re not having to put away, replenish or pick it, saving a day or two of shelf life by reducing turnaround time at the warehouse. Stores can offer fresher produce and reduce waste from spoilage. In an environment where consumers demand more fresh, healthy selections, even an extra day of shelf life can make a big impact on any grocer’s bottom line.
That’s the power of the ASN—enabling flow-through/cross-dock distribution to drive efficiency from the guard shack to the store. But in order to understand how ASNs can streamline your distribution, we need to take a closer look at your typical supermarket DC, beginning with the guard shack operation.
When a truck driver arrives at a typical facility, he presents someone in the guard shack his paperwork, usually a packing slip or a manifest. That employee goes back into the guard shack and keys in the information to determine if this is a valid delivery and if the driver has an appointment. The guard shack employee has to look at the paperwork, assume it’s accurate, and decide, or call, to determine what door it should be unloaded at to get it closer to where it’s going to be put away for receiving. This results in a line of trailers backing up, day in, day out. Meanwhile, the clock is ticking, especially on those fresh items.
Once the delivery has been directed to its door for unloading it will need to be received. The check-in process can be labor intensive and detail oriented. In most operations, check-in requires that quantities, lot numbers, expiration dates and many other criteria be manually captured at the time of receiving in order to be tracked throughout its life cycle. This information is then entered into the system of record and updated prior to any release of outbound orders for fulfillment.
If you have outdated systems in your distribution operation, you may have to receive, put away, then in many cases wait for an overnight process to update the host systems. Distribution can’t even begin until the next day, so already you’ve added a day to processing time within your DC. Another day to process, pull and ship to stores and you’ve lost about two days of shelf life. If you think you can implement flow-through in that kind of environment— dream on.
Now, let’s imagine your grocery operation with fully optimized distribution technology in place. Your vendor generates an ASN for your order, detailing quantities, lot numbers, even expiration dates—giving you complete visibility of what’s on that truck headed to your DC down to the item level. And because that ASN can drive online appointment scheduling, your system can start prioritizing and slotting loads while that truck is still on the road.
So when that driver pulls up to your guard shack and presents that ASN, the data is scanned and input into your system so fast he doesn’t even need to get out the truck. You send him straight to a designated door because you’ve already prioritized when you want to unload it and how you want to unload it.
Granted, cross-dock is difficult to do with most palleted staples such as canned goods. But, a pallet of bottled water? Most stores can sell that amount fairly quickly. ASNs make that commodity an ideal candidate for cross-dock.
The other items can be processed utilizing flow-through where the received pallets are directed to a put-to-store area where the cases are broken down from each pallet and store pallets are built based on the case level allocations.
When you enable flow technology, you reduce travel in the DC. The ability to move fresh and even seasonal items to your stores in less time can make a huge difference to your already razor thin margins.
Another trend we are beginning to see with retailers is the requirement of an ASN for all store level shipments both within their network and vendor direct deliveries. This provides the ability to leverage the same advantages for the store locations including appointment scheduling, improved visibility and streamlined receiving. Furthermore, many companies are using this functionality for store returns going back to the distribution center. This greatly reduces the time and labor required to receive, process and disposition the return items improving both throughput and turns.
The vast majority of vendors today have the capabilities to create detailed ASNs. In fact, Wal-Mart and other mass retailers require it of their suppliers. All you need to do is ask. Vendor compliance capabilities are key to Manhattan Associates’ solutions. For example, our Extended Enterprise Management (EEM) solution allows you to measure vendor performance as well as the accuracy of their ASNs. EEM even enables you to be proactive with your smaller vendors by providing them a secure log in to create ASNs and print out labels for the goods they ship to you. Now you can source wherever you want to. Even a small farm can provide ASNs for fresh local produce that can be showcased in your stores—all they need is Internet access and a printer.
All of this can happen because of the ASN—the visibility, the paperless operation, the flow-through—the efficiencies are tangible and the bottom line savings are real. When you can increase your turns and get inventory out to
Jeff Stout is a solutions architect for Manhattan Associates, online at www.manh.com.
This article appeared as a sidebar in the May 2013 issue of Food Logistics within the feature story entitled, “More Perishables, More Supply Chain Complexity.”