The ability to see which orders are coming through the pipeline is vitally important for any company. But when contract manufacturers play a critical role in a supply chain, it's imperative that those outside suppliers have up-to-the-minute order visibility.
Until late last year, though, Doskocil Manufacturing Company could not provide real-time order visibility to the contract manufacturers it hired to make some of its pet care products. As a result, orders that shipped directly from the factory to customers did not always go as smoothly as Doskocil would have liked. But new software and a Web-based portal that allowed the company to quickly exchange order and shipment information with its contract manufacturers saved the day. Not only do Doskocil's customers now have a seamless order experience regardless of where their merchandise originates, but both shipper and contractors also have eliminated order uncertainty and unnecessary administrative costs.
Pet care pioneer
Based in Arlington, Texas, USA, Doskocil Manufacturing makes pet care products and sells them to both distributors and retail chain stores. The company was founded in 1962 when Ben Doskocil developed a plastic kennel for transporting dogs and cats on airplanes, the first such pet carrier approved for airline use. Today Doskocil Manufacturing makes a wide variety of products under the Petmate name, such as pet bedding, animal feeding and watering bowls, and dog kennels. Sales for the privately held company totaled some $200 million in 2008.
Doskocil operates a manufacturing plant and a distribution center, both housed under one roof in a 1.1-million-square-foot building in Arlington. The company makes about 60 percent of the products it sells in the United States and imports the remaining 40 percent from suppliers in China. The contract manufacturers in China produce such items as food bowls, wire kennels, and water dishes. Imported products cross the Pacific by container ship, usually entering the United States at the Port of Long Beach and continuing via intermodal rail service to the Arlington facility.
The Texas distribution center ships merchandise throughout the United States, moving an average of 200 to 250 outbound truckload shipments every week. Doskocil has arrangements with about 20 motor carriers to haul its product to customers.
About three years ago Doskocil added three more contract manufacturers, this time in the United States. Terry Lemley, manager of customer satisfaction and traffic, says the company decided to outsource the manufacture of pet bedding to contractors because of capacity constraints at its Texas plant. Two of the new manufacturers are located on the U.S. East Coast, and one is on the West Coast. They ship orders directly from their factories to Doskocil's customers. The pet products company chose those particular contractors in part because their proximity to key retail accounts would reduce shipping costs.
Central control, local action
Working with the U.S.-based contract manufacturers did achieve Doskocil's goal of cutting its freight costs, but the new arrangement imposed other expenses on the company. For one thing, Doskocil needed extensive manual workarounds to communicate order information to the manufacturers through its Oracle enterprise resource planning (ERP) system. For another, order volumes sometimes were so large that one employee could spend an entire day sending e-mails and faxes containing order information, shipping instructions, and labels to the contractors. What's more, someone on Lemley's staff had to gather and key the order releases, inventory pick confirmations, and shipment information from the contractors into Doskocil's ERP system.
The shipper eliminated those time-consuming burdens—along with the likelihood of errors that arise with manual data entry—by establishing a Web portal for sharing information with its contract manufacturers. To do that, the company bought the Xtended Process Control (X.PC) software solution from TAKE Supply Chain (formerly ClearOrbit) and installed the application on its inhouse servers. Doskocil already had a working relationship with the vendor, as it had been using TAKE's warehouse management system in its Texas distribution center for 10 years. The X.PC installation and integration took 10 weeks, and the system was up and running in October 2008.
Much has changed since then. The X.PC system helps Doskocil gather important information more quickly and accurately than before. Through the portal, the contract manufacturers now can print shipping labels, confirm shipment quantities, and automatically receive shipping documents, thus eliminating the need for phone calls or faxes. Because Doskocil's Oracle transportation management system assigns carriers and routes the delivery, the selected carrier information is attached to the order, and the contract manufacturer sees those instructions in X.PC. And since the software is connected with Doskocil's ERP system, it even prevents the outside manufacturer from shipping to a customer with a credit hold.
The system also simplifies compliance with the end customer's labeling requirements. Doskocil now centrally manages label formatting and all changes in a centralized library of approved formats. This guarantees that the manufacturers will ship the orders with compliant labels printed at their own sites.
It's no longer necessary for a Doskocil employee to gather data from the contract manufacturers and key it into the ERP system. Now those suppliers immediately submit order and shipment details, including the carrier name, trailer and seal number, and number of pallets, directly to the ERP system through the portal. With such up-to-date information, Doskocil can keep its customers informed of actual order and shipment status. "It was very efficient to turn this over to the contract manufacturer, and it freed up labor here," says Lemley.
Thanks to the Web-based portal, both the contract manufacturers and the shipper now get accurate, upto- date information. "The increased visibility helps the manufacturers immensely," Lemley says. "When the orders come in now, the contract manufacturers can see them almost immediately. They know what orders are coming up. They know the volume.
They know what the stocking levels have to be." Having that data available makes it possible for the manufacturers to meet Doskocil's requirement that its contractors fill 100 percent of orders and deliver them on time. "This system gives the outside manufacturers all the visibility they need to process an order," Lemley adds.
Moreover, the enhanced visibility lets Doskocil create a seamless supply chain and promotes customer satisfaction among Petmate distributors and retailers. Among the biggest benefits for Doskocil's customers is the consistency and predictability the new system brings. Now, says Lemley, "From the customer's point of view, there's no difference between something we ship from our facility or an order that our partner assembles and ships."