If you buy or sell inventory, at some point you will need to partner with a third-party logistics (3PL) company. 3PLs can offer cost savings and many other benefits to wholesalers. When it comes to deliveries that are less than a truckload (LTL), there are some drawbacks to using a 3PL. Mainly, lead times for LTL deliveries are more erratic and sometimes longer when partnering with a 3PL.
This is a common challenge for Wholesale customers, especially when ordering from smaller vendors. Smaller vendors are “small” because they often provide a limited number of products and therefore cannot practically fill an entire truck in a single order. That’s why a 3PL is needed in the first place. 3PLs can group purchases from different vendors to different buyers on a single truck. The problem is your inventory isn’t the only inventory on that truck. The truck will need to make multiple pickups and deliveries in each area, which causes your lead times to fluctuate.

Reduce Lead Times and Transportation Costs with Super Vendors

In HIMPACT, buyers can take greater control of deliveries by grouping different vendors together to save on transportation costs and reduce lead times.

Instead of using 3PLs in these scenarios, HIMPACT users can take advantage of a feature called Super Vendors. Super Vendors are a group of vendors which you buy together from the same region. A super vendor could also be a vendor that multiple buyers in your organization purchase from depending on the department they are in. In the either example, we are building to one truck, one delivery.

How Super Vendors Works: Real-World Example

One of our wholesale grocery clients operates out of Rhode Island. They buy from 12 smaller vendors in the same general area of upper state New York. To reduce transportation costs and lead times, they wanted to send a single truck each week to this region, but they only wanted to pick up orders from half of the 12 vendors one week, and then half the next week. So, the truck would only go to each vendor every other week.

Here’s how we were able to help them accomplish this goal.

Using order cycle simulator in HIMPACT, we saw how large the typical order for two weeks of coverage was for each vendor.

Then, using Order Cycle Analysis capabilities of HIMPACT, the vendors could be grouped, and simulations of various order sizes could easily be conducted to find the optimal way to group these vendors.

Our client had never purchased in this manner from their vendors, so there was little to no data to pull from. However, HIMPACT’s Order Cycle simulator provided new insights.

Applying what was learned from the simulations and insights, we began grouping the vendors accordingly. We gave larger vendors (ranked 1-4) priority. We put vendor 1 and vendor 3 in the same group, and vendors 2 and 4 in a second group. Every other remaining vendor was assigned to either the first or second group.

The plan was for group 1 to be filled every 11 days, and group 2 would be filled every 16 days. After some fine-tuning which vendors were in each group, this process became very dialed in with each group representing 14 days of supply.

Super Vendor Results

Over the past five years, demand for various products has fluctuated on occasion. As a result, these simulations are rerun, and the groups are rebalanced accordingly. However, our client can stick to this delivery schedule for several months at a time without reworking them. They consistently send a truck once a week, hitting each group of vendors every other week.

They have reduced transportation costs and have consistent lead-times that they can control.

See Super Vendor in Action

Ready to see how Super Vendor can help your company take back control? Connect with our team of experts to learn more about Super Vendor and have all your questions answered.

Super Vendors is only one of the many features of HIMPACT that make it a superior buying tool. Contact us today to learn more about all the features HIMPACT has to offer and see how they can help your buyers reduce inventory and improve service level goals.