Automating Myer’s international supply chain

Having worked with their existing provider for 12+ years, Myer – Australia’s largest department store chain and importer of a broad range of products from fashion to homewares and food – and was looking for some fresh thinking.

Myer felt that they no longer knew what good looked like and were seeking a new partner with a strong reputation for innovation.  In 2020 Myer invited Ligentia to take on the management of its international supply chain with the objective to improve supply chain efficiency, increase vendor compliance and deliver added value and critical path visibility.

Solution: A risk-managed end-to-end solution leveraging automation and digitalisation to maximise efficiency

Myer’s requirements were complex – they were seeking innovation, but to ensure the solution could be up and running as quickly as possible, the technical solution needed to replicate its existing set-up  – including 12 separate integrations with their internal systems.

From day one, we made a number of enhancements to Myer’s supply chain operations, including:

• A tailored Landed Cost calculator with PO line and unit level data visibility
• A new Vendor Portal to handle bookings, supplier confirmations and online ‘Declarations of Origin’ (replacing a ‘certificates of origin’ process which required paying fees of $75USD per destination PO)
• Reduced number of hubs in China from 4 to 2, Shanghai and Shenzhen hubs were moved to Ligentia bonded logistics park (BLP) facilities
• Vendor management and performance including SOPs
• Automated electronic documentation capture removed manual paper-based processing

The original implementation was delivered with a significant focus on risk management, including the following measures:

• Transition from incumbent carefully scheduled and managed so as to not impact key trading periods
• Technical solution matched legacy set-up in terms of integration points to maximise stability of the supply chain during the transition
• Comprehensive vendor education programme to support vendors through the change and train them on the new processes
• Dedicated individuals supporting Myers buyers and allocators on use of Ligentix and Ligentia’s other self-serve tools (via Ligentia’s Customer Hub)

Value added services offer further efficiencies for Myer

In addition to the technical solution, Ligentia provides value added services to further optimise Myer’s supply chain.  Delivered at our 4 dedicated hubs (Shanghai, Shenzhen, Mumbai and Port Kelang), and crucial to the vendor compliance support that we provide, these services include:

• Receive Myer’s PO’s from their numerous overseas suppliers
• Full unit piece count and QA check all inventory received
• Pre-retailing services including price label check, unit size, colour, style, hangar and stitch check
• Prepare the products so store-ready including security tagging
• Port split each order against Myer’s store allocation using WMS
• Scan pack every unit of stock against each store’s allocation list
• Repack for shipping to Myer’s 4 distribution centres in Australia

Myer Central Logistics works closely with our customer success team on the ground in China to anticipate and mitigate volume spikes. However, there are strategies in place to ramp up output for peak periods such as Christmas and other promotional trading windows.

Impact: Efficient and cost-effective operations – under control

In the second year of the partnership, we supported the customer in shipping, storing and distributing 5,290TEU into Australia. What’s more, the customer has benefitted from:

• 88M units of inventory individually picked and scan packed through our 4 offshore VAS facilities
• in the same period
• 87% container utilization achieved , +7% compared to previous provider
• End-to-end visibility of their supply chain critical path – from production confirmation, to freight booking, through to delivery to stores spanning Australia
• A global supply chain operation that works far more efficiently and effectively than previously
• Through effectively managing Myer’s purchase orders to ensure that priority items arrived in Australia when they were needed, Myer was able to achieve growth during the pandemic when other retailers struggled – online and in store!

Following a successful first two years of the engagement, Ligentia continues to identify new areas for improvement, with the aim of reducing technical complexity (where this is possible) and driving further innovation so Myer can extract even greater value from their supply chain.