In all lines of business, steady growth is a good thing. But with that growth comes the need to be able to run smoothly and efficiently, too. For Bargain Hunt, a LaVergne, Tenn. (near Nashville)-based discount retailer, making the changes it needed to make to accommodate growth came with some vital and commensurate steps on the supply chain side, in the form of key changes and efficiency gains for both transportation and distribution.
With 90 store locations in the southeast and as far west as Arkansas, Cincinnati, the Carolinas, Georgia and down through Alabama, and Mississippi and more on the way, it became clear, in recent years, to Bargain Hunt that in order to make its future goals of expansion a reality, it needed to work with a supply chain partner that would check many boxes for it, to truly spur the process.
Prior to kicking off its expansion efforts a little more than two years ago, Bargain Hunt’s retail distribution playbook was one that served the company well, when its store count was smaller and closer to the Nashville area, according to Steve Silverman, Senior Vice President Supply Chain, for the company.
“The dedicated supply solution we had before had all assets (drivers and power units) based at our distribution center in Antioch, Tenn., and the contracted rate structure included leased equipment and mileage plus fuel surcharge fees,” he said. “The solution served us well [but] as we expanded stores and geography, the solution was not scalable nor economical and was not in service to our stores. The solution only provided for a drop-and-hook delivery, which required additional trailers and took store personnel away from their primary duties of merchandising and taking care of our customers.”
Silverman went on to explain that with all the assets based at Bargain Hunt’s distribution center in Antioch, and a need to service stores as far away as Atlanta, North Carolina, and Cincinnati, its asset utilization dropped to approximately ten hours a day.
“When I arrived at Bargain Hunt over two years ago, the supply chain team needed to do a better job caring for our stores… we needed to fix that,” he said. “Part of that was how we delivered to the store. So we had to be in service to the store and wanted to have drivers unload at the store, which on a drop-and-hook model, you don’t get.”
Another previous issue identified by Silverman had to do with Bargain Hunt’s trailer pool, which was comprised of more than 270 trailers for around 20 tractors, a situation he said “made zero sense” financially. The reason for that was related to scalability, in that every time Bargain Hunt opened up a store it had to get a couple trailers, and, based on its asset utilization, in most cases, it needed more trailers, which becomes an issue. And on top of that Bargain Hunt’s other objective was to have delivery from Sunday-Thursday to allow its store the ability to get stores prepared and fully stocked for the weekend.
“The model that was here just did not work,” said Silverman. “It was not scalable efficient, or economical and was definitely not in service to our stores and we needed to change it.”
With that mindset, the race to change was officially on for Bargain Hunt. Silverman said a big part of that change related to how it delivered to its stores, with drivers unloading freight requiring Bargain Hunt to deploy new delivery assets like roll-tainers and totes for its stores, so it would be able to organize freight in a better way so that store personnel could quickly get merchandise to store shelves. That was a chief objective, considering that its truck-to-shelf times ran in the neighborhood of 50-to-65 hours, with Silverman saying that needed to be cut to less than 15.
This, in turn, is what formally got the ball rolling for Bargain Hunt’s relationship with Averitt Express, too.
“We now had this asset recovery that we also needed to have a solution for,” he said. “That led us to talking to a couple of providers that we knew had secure relay points and terminals within the vicinity of clusters of our stores. We also wanted to be of service to our other customers as a supply chain, which really is our merchants on backhauls. When you look at all of the requirements we spoke to a couple of providers that had what we call relay terminals, or cross-dock terminals, in the geography of our stores.”
As for what led to Bargain Hunt to Averitt, Silverman said he already had a relationship with Averitt calling it an organization that was customer-centric, built from the drivers up, knew how to get freight on and off a truck efficiently, and is always in service to its customers.
“And when you started lining up their relay LTL terminals with our stores, they lined up very well,” he noted. “In addition to Averitt’s LTL capability they have a dedicated linehaul group. We wanted the best of both worlds with one provider.”
Bargain Hunt got the ball rolling with Averitt at a relay terminal in Cincinnati in early 2019, followed by two Atlanta-area terminals in Fulton and Norcross.
“We took approximately three months with these terminals becoming fully operational and worked out the kinks, mostly systems integration, tendering process, backhaul coordination, asset recovery, and invoicing,” he said. “With the kinks ironed out we then we opened up the other terminals in June.”
And with the right partner and processes now in place, the subsequent benefits for Bargain Hunt outlined by Silverman were substantial. Through this partnership, Bargain Hunt’s dedicated trailer fleet was reduced from 26 to 16 and trailers utilized went from 270 to fewer than 110, and its total number of miles driven was reduced by 20%.
“The trailers are doing linehaul through the night, and when that truck gets back to the yard at 6 a.m., the day driver jumps in and makes all the local deliveries to the stores, brings the assets back, picks up a backhaul and does whatever needs to be done in the market for the 11 hours they drive that tractor, and then the night driver gets back in and goes to the Antioch DC,” he said.
Silverman noted that Averitt’s dedicated linehaul capabilities, in tandem with its LTL capabilities, are a nice perk, in essence, providing “the best of both worlds” with one provider.
“We wanted to run our tractors 22 hours a day, and we now move our linehaul runs into the local terminals over night and have a day driver get the same tractor and deliver to stores, sweep out back rooms of assets and cardboard and also pick up our backhauls in a local market,” he said. “We are doubling per-tractor utilization hours and getting better service to our stores. Additionally, we now are able to pick up approximately 86% of our eligible backhauls in our geography.”
What’s more, these efforts also led to increased driver satisfaction, as they helped keep drivers fresh and also with driver retention efforts, too.
“They sleep in their own bed at night and are home everyday,” said Silverman. “We are not driving sleeper cabs. It helps in a tight driver market with driver retention, too. That was another problem we had, because when we needed to scale up for our peak season we had no internal fleet capacity because everything required another tractor and required another sleeper cab. We had to go to third-party carriers, which then sacrifices the service you give to your store.”
Another notable aspect of the collaboration between Bargain Hunt and Averitt focused on technology, with visibility and the real-time exchange of data made possible through an integrated TMS replete with up-to-the minute tracking updates. But it was not always that way.
In the past, Silverman said processes were handled manually and created in a spreadsheet, coupled with the fact that there were no relay points as there are now, leading to drivers being delayed and running out of service hours, too.
“It was a week-to-week schedule based on how we were utilizing the assets we had,” he said. “And now it is a set schedule based on allocation volumes we are giving to the store.”
The TMS Bargain Hunt now uses is integrated with Averitt’s back office, coupled with a tendering system Bargain Hunt created to send to Averitt for every leg of the journey.
“The reason we do that now is when we pull back the billing file, the billing file is attached to a general ledger cost center, whether it is store freight or the cost of goods for backhauls,” said Silverman. “Every leg of the journey is billed off, or accounted for, in the accounting system.”
And with its multiple relay points in the market, he added that Averitt is now able to get a two-hour window delivery for all of its store deliveries.
“We worked with the terminals based on traffic patterns and the right way to run miles in the market, and we developed a standard truck schedule for our stores,” he said. “We have two schedules: a peak season schedule and a non-peak schedule. With a guaranteed two-hour delivery window our stores are better planned with labor because they know when their truck is coming.”