Aside from all of the technological advancements that can be counted in the c-store-supplier relationship, clear, interpersonal communication tends to remedy most situations when a kink appears in the supply chain.
By David Bennett, Senior Editor
A technology-first approach often enables businesses to better meet consumer demand while growing margins and increasing productivity. In this closely-watched industry, convenience retailers continue to push the envelope in new ways.
As in years past, successful collaborations between retailers and suppliers are increasingly essential.
Suppliers and retailers are increasingly turning to technological solutions for many of these issues. Evolving scanning capabilities, inventory software and progressing point-of sale systems are built to make retailers’ lives easier. Often, however, those advancements aren’t a substitute for a solid supplier relationship.
Reliable means of communication between the supplier and the retailer is as paramount as ever. Not only can a c-store rapidly address or even prevent any sort of stock issues, delivery mishaps and purchase order mistakes, but good lines of communication with a supplier also ensure all agreements are being followed through on.
CENEX ZIP TRIP
Convenience Store Decisions asked Steve Haase, general manager of Cenex Zip Trip in Spokane, Wash., to explain some points regarding the delivery platform for the 69-store chain as well as what goes into its supplier relationship to maintain productivity. Those stores—the retail arm of CHS Inc.—are located in six states including Idaho, Minnesota, Montana, North Dakota, South Dakota and Washington.
Convenience Store Decisions (CSD): There are some instances in which exploring alternative delivery models can have a great impact on a business. Considering that Cenex Zip Trip boasts a broad geographic footprint, how did the company settle on its current delivery model?
Steve Haase: We have had a long-term relationship with Core-Mark International for 15 years and it has been great for us. They have three warehouses that take care of our stores, which are spread between Washington State and Minnesota. Core-Mark does an excellent job of servicing our stores—most often twice a week. Their delivery window is a good fit and their fresh program works perfectly for our layout (no kitchens). They suggest new items and get us the items we do request.
CSD: What are the benefits of having a dependable (direct store delivery) DSD partner?
SH: It gives us peace of mind knowing Core-Mark looks out for our best interest, which is beneficial for them as well. They are dependable, have great service and we are able to get a majority of what we need outside of our cooler, via one source.
CSD: Does the company’s DSD model ensure greater control over retail shelf space at Cenex Zip Trip locations? How so?
SH: Absolutely. As we both have a vested interest in our shelf space—with a mutual goal of merchandising the best-selling items available. It does neither of us any good to have slow movers on our shelves and they are helpful at suggesting different items to replace these slow-moving items.
CSD: Have you found that direct store delivery greatly reduces the time and manpower spent merchandising?
SH: We use Core-Mark’s SmartStock program, which allows us to utilize the company’s experience and manpower to help us order certain areas of the store for our deliveries each week. They then come back the next day to supply those SmartStock items. While doing this, they make sure tags are up and visible, product is ordered and coded merchandise returned, or bad merchandised out. This allows our employees more time to help customers and carry out other daily responsibilities.
CSD: What has the effect been on shelf inventory management at Cenex Zip Trip locations?
SH: It helps tremendously because Core-Mark is the one focused on ordering, facing and tagging. Instead, if our people were doing it all, they would be running back and forth between helping customers while trying to order. It doesn’t always work. This also minimizes over-ordering. Also, it’s a great opportunity to pull slow movers.
CSD: How has this arrangement influenced Cenex’s capacity for negotiating supply contract?
SH: Again, with our long-term relationship with our supplier, they understand that in one way, we are their biggest fish in what might be considered a small pond—when you look at our rural, geographic footprint. We understand Core-Mark’s strengths, and based on our needs, choose to do business with them over other distributors.
CSD: If you could provide one tip for effectively negotiating a supply contract, what would it be?
SH: Whether you have a long- or a short-term relationship with your supplier, you must ensure that you are doing your due diligence to ensure the best deal for your company. There are other options for suppliers, which we know will keep them honest. While I like the relationship we have with our supplier, they know that alone won’t keep us from looking for a better deal from one of their competitors. The bottom line is to look at all offers from all suppliers to ensure the most advantageous arrangement for your company.
CSD: How has the company’s delivery model impacted retail profit margins over the last few years?
SH: Based upon our supplier agreement, it has had a huge positive impact on our bottom line.
