Scotts & Co improves supply chain trading with Kewill solution

Summary

Scotts & Co, the multi-channel homewares retailer, has improved the management and fulfilment of customer orders by implementing Kewill Trade, a powerful supply chain integration solution, to improve trading with its direct despatch supplier base.

Background

Scotts & Co is an independent UK multi-channel retailer operating eleven diverse brands offering products for the kitchen, home and garden, as well as gifts. These products are distributed through an integrated network of catalogues, websites and stores. With annual sales in excess of £50m and over 250 employees, Scotts & Co operates the UK’s largest group of independent specialist catalogues in the country, whilst remaining family-owned and run.

The group, whose flagship brand, Scotts of Stow, is a household name, operates some of Britain’s best-known catalogue retailers, including; Presents Direct, The Traditional Garden Supply Company, Cucina Direct, The Original Gift Company, Viva, The Verdict and Renwoods Solutions. Scotts & Co is completely focused on offering excellent customer service, and has won more industry awards for its catalogues and websites than any other catalogue group in the UK.

Having started trading as a single catalogue brand, Scotts & Co now operates as a truly multi-channel business. In addition to distributing over 50 million catalogues every year and operating a chain of successful retail stores, its various transactional websites generate over 20% of sales, frequently from customers browsing a catalogue or in-store and subsequently logging on to order. This figure is set to grow as Scotts continues to invest in web technology and the predominately 50-plus age range customer base becomes more confident in shopping online, while younger customers are attracted by a wider lifestyle offering.

Challenge

With such a diverse range of products on offer, a key element of Scotts & Co’s supply chain strategy involves the direct despatch, also known as ‘drop ship’, of orders made through its catalogues, in store or online, for a wide variety of items ranging from bird feeders and avocado slicers to step-ladders and personalised whisky.

These orders are fulfilled directly by the supplier and delivered to the customer by Scotts’ nominated carriers, reducing the volume of stock held in Scotts & Co’s own warehouses, thus minimising transportation and handling costs, but most importantly matching customers’ increasing appetite for fast delivery, particularly for online orders. Direct despatch now accounts for around 70% of Scotts & Co’s customer deliveries. The number of suppliers offering direct despatch has reduced in recent years as demand has been consolidated but Scotts & Co still trades with over 300 core suppliers on this basis.

However, trading with direct despatch suppliers in the same way as other suppliers created a number of additional, often manual, processes and checks between the order and fulfilment stages, as data was transferred from Scotts & Co’s customer order system, Elucid, to a third party agency who produced over 50,000 order fulfilment documentation sets annually. These were then mailed to the supplier, with feedback of order fulfilment information following an even slower and more complex paper-based procedure in reverse.

These additional processes ultimately combined to create an unreliable picture of stock availability, leading to a lack of clarity for customers at the order stage and often unnecessary delays in customers receiving their goods, and additionally leaving Scotts & Co without visibility of the status of customers’ orders after the initial order placement. Despite the clear benefits arising from the direct despatch approach, it was essential that Scotts & Co could ensure the delivery of a consistent customer experience, regardless of the order channel or fulfilment method, going forward. 

The rigidity of the fulfilment cycle also left little scope for using different carriers, leaving Scotts & Co reliant on a small number, and therefore unable to fully mitigate the potential risks of carrier volatility or benefit from increased diversity of service and price competition amongst UK carriers.

In 2008, the company therefore began the process of selecting an electronic order management solution that would integrate its direct despatch supply chain and drive real improvements to customer satisfaction.

Solution

Following a detailed market analysis, Scotts & Co selected Kewill Trade, a web-based order management system which has extensive workflow functionality and inbuilt data integration points, with the system being implemented during 2009. The solution provides Scotts & Co’s 10-strong team of Buyers and Merchandisers with complete visibility of the fulfilment cycle of its 1.7 million per annum direct despatch orders and the flexibility to set rules, for example governing the carrier and service level that should be used, which are automatically included with the order data to the supplier.

Kewill Trade also provides Scotts & Co’s suppliers with a simple, user-friendly system to receive and manage its orders, from initial visibility of purchase orders right through to despatch, with the system automatically generating a Scotts & Co branded documentation set for each order. A ‘Whiteboard’ facility allows both Scotts & Co and its suppliers to add comments to a specific order, such as personalisation details, and a detailed history provides users with an audit trail of all status changes in the life of the order.

The Kewill solution is fully integrated with Scotts & Co’s Elucid order management system. Larger suppliers who prefer not to use the web interface are able to integrate their own warehouse control and accounts packages with the Kewill system.

Keith Greasley, Warehouse Operations & Logistics Director at Scotts & Co comments: “With over 70% of our orders fulfilled on a direct despatch basis, optimising the process was crucial to our future success. Our suppliers trust the integrity of the data held in the Kewill system, which is imperative when assessing service levels and negotiating future terms. Working more closely with our suppliers is a key part of our ongoing strategy and Kewill is helping us to do that more effectively.”

Scott’s & Co’s management team now benefit from real-time visibility of the direct despatch supply chain and detailed reporting using the Kewill system.

Benefits

The key benefit of Kewill Trade, which was very quickly realised, has been shorter delivery times for customer orders. Prior to implementing the new system, Scotts & Co promised delivery to its customers within 14 to 28 days. Less than three months from implementation, the company had committed to a new delivery timescale of 10 to 14 days and has maintained a consistent service level ever since. Future developments already planned will enable Scotts to reduce order to delivery time further.

The implementation has allowed Scotts & Co to conduct a full review of its carrier strategy and introduce a revised roster of approved carriers and a more flexible delivery schedule, delivering progressive savings of 10% of annual carrier costs.

The system also provides a dashboard, giving at-a-glance visibility of key performance indicators for both Scotts & Co’s Buyers and Merchandisers, who can see instantly activity which may impact on customer satisfaction such as rejected orders or delayed items, and its direct despatch suppliers who have clear visibility of activities which may impair their service level agreement. This not only allows the Supply team to develop a deeper knowledge of the reasons why items are out of stock, improving forecasting, but to provide assistance to suppliers who are not meeting its expectations and ultimately those of its customers.

Kewill Trade has eliminated the need for a centralised printing process, which as well as contributing to the improved turnaround time for orders to be despatched, has reduced the environmental impact of fulfilling Scotts & Co’s orders, as complex documentation sets no longer need to be produced and mailed to suppliers. Those suppliers who consistently ship immediately on receiving orders will also see quicker payment, improving their cash flow.

A further major benefit is the flexibility of the system, which will allow unlimited rules to be applied to the order management process to meet Scotts & Co’s current and future business priorities. For example, the system currently allows for a ‘priority’ order flag which can be set to indicate that the supplier should process particular orders first. This allows Scotts & Co to react to specific market or customer requirements.

Keith Greasley continues: “The direct despatch project has proved a win-win for Scotts & Co and our suppliers. Kewill has enabled us to increase customer satisfaction whilst reducing operational costs and improving visibility for us and our suppliers. They understand the retail supply chain and that showed during the implementation.”

Future

Despite the improvements to the customer experience already realised by the implementation of Kewill Trade, Scotts & Co has no intention of resting on its laurels and has further enhancements to the direct despatch process firmly in its sights.

The Kewill system is playing an increasing role in driving forecasting improvements as Scotts & Co continues to work more closely with its suppliers to fine tune the range of products on offer, and the quantity of stock available, ensuring the company continues to hit the right note with its loyal customer base.

A further project is underway with Kewill to streamline the out of stock process which is followed by Scotts & Co’s suppliers, with the system being developed to recognise the estimated date when out of stock items will be available again, removing the need for suppliers to keep dealing with requests for out of stock items.

Keith Greasley concludes: “Kewill is recognised as the UK’s ‘industry-standard’ process for management of a direct-despatch supplier chain. It has been adopted by a wide range of companies, particularly substantial catalogue and online retail business that use third-party despatch” as a core part of their supply strategy.”

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