Driving Efficiency and Innovation: Stage Stores’ Commitment to Continuous Improvement

Continuous improvement is woven into the culture at Houston-based Stage Stores, a 90-year-old small-town and neighborhood retailer of brand-name family apparel. It’s especially true at its three highly automated, regional distribution centers in Jacksonville, Tex.; Jeffersonville, Ohio; and South Hill, Va., which are a total of 800,000 square feet and employ nearly 700 associates.

There is an expectation at the company that every year will be better than the prior year. That requires not only committing to improved metrics but also defining a way to execute them. It’s no longer good enough just to do things well, but rather courageously to break from the status quo and make a real difference. Sometimes it could all be in the execution if there were known problems the prior year. But most of the time it means implementing a new process or improved technology.

Regardless of the method chosen, the company explains, it always involves interacting with other internal departments, other pyramids and/or other trading partners to accomplish the desired results. In most cases, it also requires a degree of courage and a great deal of trust on the part of all involved. That’s where relationships come into play.

Outbound expense

Delivering to more than 800 small stores in 40 states is much more costly than bringing in fully loaded truckloads primarily from California and New York. Forward Air Solutions (FAS) provides a pool-distribution service for Stage Stores, delivering merchandise from the company’s three distribution centers. The agreement is that the line haul trailers must be filled in order to leave the distribution center.

To help accomplish this requirement, FAS brings fully loaded trailers of merchandise for other retailers operating in the same regions as Stage Stores into its distribution centers for sorting onto the appropriate outbound line haul truck for that respective region. The mutual benefit: Stage fills outbound trailers quicker, the other FAS client benefits from full truckload line haul rates, everyone benefits from lower “blended” delivery rates due to improved density – as opposed to dedicated trucks for only a single client – and FAS minimizes handling expense by using Stage’s automated sorting equipment. Even though there are quality checks in place, it still requires trust on the part of all involved, but the synergy allows all parties to win.

Along those same lines, “empty miles” are every carrier’s nightmare. Shippers avoid LTL if they can build a more cost-effective full truckload. So if FAS is delivering in or around zip codes where Stage has LTL-size shipments ready for pick-up, shouldn’t they be able to fill some of those “empty miles” with revenue, but at a discount to the shipper? Absolutely, and they do. Everyone wins.

Managing Mode

Stage uses a TMS to optimize the inbound loads, with an expectation that the percentage of full truckloads will increase each year, as well as the total average cube utilized on those loads.

Increasing regulations and a growing shortage of drivers have pushed the focus more heavily onto cube utilization and increased the use of intermodal. Alliance Shippers and JB Hunt share the responsibilities as Stage’s intermodal carriers, handling an increasing percentage of the total truckload tonnage each year by moving most of the consolidation loads from each coast.

Break from the Norm

Stage has a number of projects underway using iPads to replace paper and reduce clerical key entry time. The first project is internal, replacing receiving worksheet documents used to validate content of shipments. Multi-page printouts containing detailed style/color/retail/quantity information for the purposes of auditing will be replaced by populating an iPad with that same info when the shipment number is entered. The savings will come from not only saving reams of paper and the associated printer supply costs, but also the payroll avoidance from collating and batching the packets for each trailer, then filing the paperwork when receiving is completed.

In a similar project, the iPad technology is being employed by GXS/OpenText to capture shipping violations during the receiving and auditing processes. Processes that involved recording violations onto a preprinted form that was later key-entered will be replaced by a scan and click. In addition, pictures to document the errors found that were previously downloaded from a digital camera and subsequently matched to the key-entered document will now be photographed with the iPad and automatically connected to the violation, which will simultaneously initiate an email to the vendor, notifying them of the error. Now all of those functions can be performed on the iPad. It is anticipated that the number of audits performed can now increase by 40 percent using the same man-hours.