Advanced Pool Distribution: Part Three – Value-add Services and Custom Programs

( This article is excerpted from the complimentary report
Advanced Pool Distribution: Key Enabler of Retailers’ Omnichannel Transformation,
available for download here. )

In Part Two of this series, we looked at what differentiates advanced pool distribution from basic pool distribution. Here we take a deeper look at the types of value-add services and custom programs that advanced pool distribution providers may offer.

Value-add Services and Custom Programs

A pool distribution provider may also provide a variety of value-add services and customized programs for retailers, such as:

• Precise sortation — Some PDs will, for example, presort apparel, in an area near the shipping dock doors, according to which department it will go to: Men’s, Women’s, Children’s, and Accessories. The individual cartons are then fluid loaded onto the trailer in a precise, per-department sequence, rather than the random order they happen to arrive in. This enables rapid unloading and putaway at the store. In addition, the delivery driver and their assistant may have instructions to deliver certain cartons to certain locations within the store, near where those cartons will be stocked. This could be a critical service for some locations, not only for rapid shelf replenishment, but for quicker direct-to-department unloading at space-limited stores, such as a downtown store that has very restricted, limited-time parking and constrained unloading space availability.
• Trap and hold/virtual back room — The PD can hold back portions of a specific inbound shipment until a specific date and time, while other cartons from the same shipment are cross-docked and sent to the store right away. The held-back inventory may be held at the DC or stored at a nearby offsite location (see next bullet), to be later pulled back in and blended with other future cross-docked shipments.¹ This capability, combined with frequent, flexible store replenishment shipments, allows the pool DC to act almost as a ‘virtual back room’ that nearby stores can replenish from for precise resets. A store might place an order late in the day for just the right amount of merchandise to be delivered and restocked right after closing or before the next morning’s opening, so that the store is fully stocked and ready to go at opening.
• Offsite inventory — Sometimes a retailer requires more storage space than is available at the pool distribution center, for example to hold inventory in preparation for the holiday season or for e-commerce shipments. When directed by the retailer, the PD provider sends parts or all of a shipment to an offsite location, which is typically staffed by the shipperthemselves. They may do only full case or they may do a blend of full case and SKU-level warehousing. The shipper picks and packs orders and the same pool carrier comes by and picks up the orders, bringingthem back to thepool distribution center, and blending them into the day’s shipmentsbound for the stores. Alternatively, the PD provider may leave room in store-bound trucks and pick up those casesat the offsite location on the way to the store.

• Floor-ready merchandise preparation — Some PD providers offer floor-ready merchandise preparation services, such as steaming, hanging, and sequencing of garments.
• Store shelf restocking — In some cases, the delivery driver and their assistant will unpack and restock the store shelves directly, freeing up store associates to spend more time with customers.
• Ship-from-store — While they are there, the driver may also pick up (or even pick from shelf) ship-from-store orders and bring them back to the DC for parcel shipment or to combine with a TL or LTL shipment for zone skipping. They may also put the order onto another of the PD provider’s outbound trucks for drop off at the customer’s house or another store for in-store pickup.
• Pickup in Store — The PD provider can also deliver individual orders to the store that a customer requested to pick up in that store. These may be an order placed by the customer online or in the store with an associate.² The PD provider can be instructed to put the customer’s order in a separate specified customer pickup order prep location for store associates to prepare it for customer pickup.
• Fulfill-from-PDC — PD providers may pick, pack, and ship individual e-commerce orders for the retailer, either shipping them directly to the consumer, or to the store for store pickup. If the inventory for the order exists in the PDC and is not already allocated,³ then that PDC inventory can be used to fulfill the order. If the PDC lacks the necessary inventory, then the items may be shipped from the retailer’s DC to the PDC to fulfill the order (see ‘zone skipping’ below).
• Zone Skipping Parcel Delivery — E-commerce orders that would be normally sent via parcel from the retailer’s DC directly to customers in other shipping zones, can now be sent most of the way there on the same truckload deliveries carrying store replenishment inventory.⁴ The PD provider then sends those orders via parcel for the last leg to the end customer, at a significantly lower total cost. In some cases, pre-labeled ecommerce parcels are loaded at the retailer’s DC into one or more bulk boxes⁵ which are sent to the PD provider, who delivers the bulk boxes to the parcel carrier’shub. Some PD providers may even provide direct delivery to thecustomer with their own vehicles at a lower cost, if they are making other deliveries in that same neighborhood anyway.

• Kitting/Assembly/Installation — Kitting services may be provided, such as building kits of special merchandising fixtures for promotions. Some PD providers have operations for assembling exercise equipment, furniture, or other assembled items. A few provide ‘white glove’ home delivery service, with installation.
• Returns processing/refurbishment — Some PD providers offer reverse logistics services for things like product returns, promotional display returns, excess promotional or seasonal inventory, and so forth. In a few cases, they will provide value-add return services such as disposition decision-making (refurb vs. return vs. liquidate vs. dispose), refurbishment, and/or repackaging.

Advanced pool distribution providers are in constant dialog with their retailer clients, working closely with them to understand the retailer’s needs. The PD provider often demonstrates the creativity and flexibility needed to design and add new value-add services, when it makes sense for both parties. Retailer-specific and even store-specific programs can be created out of combinations of these services to fit the retailer’s unique needs by location. These programs can contribute not only to logistical efficiency, but to an improved shopper experience, for example by decluttering stores, ensuring merchandise is on the shelves on time, and freeing up associates’ time to spend it serving customers directly.

Advanced Pool Distribution Provides Flexibility and Control

In dynamic, hard-to-predict, interrupt-driven retail store environments, a store may need to change delivery times at the last minute; or they may want the delivery split — deliver part now, hold the rest and deliver it at the end of the day; or any of countless other variations of last minute changes that may be needed. The best practices of pool distribution described earlier mean that the vast majority of cartons are flowing according to plan, without errors. That level of error-free execution, combined with precise granular, near real-time visibility, enables exceptions or changes to be accommodated much more smoothly and easily. That kind of last minute change and precise control is not possible with parcel or LTL where deliveries are going to show up whenever they do, regardless of whether the store is ready or not — or regardless of whether those items are needed at that time or earlier or later. Pool distribution provides valuable flexibility and control to retailers.

Figure 1 summarizes the kinds of capabilities and services that an Advanced Pool Distribution provider offers. This illustrates the additional value provided by advanced pool distribution vs. basic pool distribution.

In the fourth and final installment of this series, we look at why pool distribution is becoming so popular now, how it can improve the shopper experience, and how it is one of the key enablers of omnichannel excellence.

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¹ The pool carrier is responsible for sorting and temporarily storing carton-level inventory. When released by the shipper out of that held-back inventory, the cartons get added back into the next replenishment shipment going out to the store; or alternatively they may be sent as their own separate shipment to the store later that day or evening. — Return to article text above
² The inventory to fulfill a pickup-in-store order from the PD may come from a shipment from the retailer’s DC that was sent specifically to fulfill this order, or from supplier drop ship for the order, or pulled from trap and hold inventory, or transferred from another store. — Return to article text above
³ The PDC may ‘borrow’ from store inventory at the PDC to fulfill an order, provided that inventory at the PDC will be replaced/replenished from the retailer’s DC in time to meet the stores’ upcoming needs. — Return to article text above
⁴ That is, provided the promised delivery window can still be met. If the customer requested next day or 2-day, then this approach often will not get it there on time. However, for standard ground delivery with a wider window, this approach often works, especially for active, high volume pool points where the retailer is sending truckloads daily. — Return to article text above
⁵ A bulk box is a pallet-sized box, sometimes referred to as a Gaylord container or Gaylord box. — Return to article text above

To view other articles from this issue of the brief, click here.