Ordering Made Easy
Customer service is more than a priority at The Container Store—it’s a core competency. So it’s no wonder that the retailer was unhappy with the fact that some of its key store-level staffers were spending hours in the back room—as opposed to on the selling floor—ordering toilet paper, aprons and the like through a cumbersome manual process.
“Prior to early this year, we maintained detailed Excel spreadsheets for non-merchandise store supplies such as bags, aprons and office and cleaning supplies,” explained Scott Jones, purchasing agent, The Container Store, Coppell, Texas, which operates 48 stores nationwide. “One key store-level employee would count supplies, compile an order and fax or e-mail it to headquarters where it would be reviewed, approved and keyed into the warehouse management system.”
The order subsequently ended up in the hands of the Coppell central distribution center, where employees would pull supplies from inventory and ship them to the stores. But the company had come to the point where it knew it needed to make a change.
“We needed to upgrade the system, eliminating the spreadsheet and the amount of time spent keying in orders,” Jones said.
The Container Store opted to implement a cloud-based, e-procurement solution from San Mateo, Calif.-based Coupa Software Inc. that would allow store-level employees to log on, see pictures of the available products and their costs, click the items and quantities, and return immediately to the sales floor.
“Having our employees see pictures of the products they’re ordering, along with the cost, has prompted them to be better stewards,” Jones said. “In fact, we’ve seen a 3% decrease in supply spend because of it.”
By managing its requisition and purchase order processes through the new system, The Container Store also can accurately charge supply costs to individual stores based on supply usage, instead of more arbitrary measures like cost allocation based on percent of sales volume.
The software, which is integrated with The Container Store’s warehouse management system, has allowed The Container Store to establish direct-ship relationships with many of its vendors. Previously, the retailer was maintaining all non-merchandise inventory in the central distribution center—eating up about 20,000 sq. ft. of space.
“Because Coupa has allowed us to have many of our vendors ship directly to stores, we have been able to reduce what was about 800 SKUs of non-merchandise inventory by about 200 SKUs, freeing up 25% of the space formerly devoted to non-merchandise inventory in the DC,” Jones said.
Items such as office supplies and light bulbs are now direct-shipped from the vendor in a step that is invisible to the employee placing the order.
“If you’ve ever ordered anything online, you know how to use this solution,” added Bram Warrick, operations analyst, The Container Store. “You just select what you need, click and you’re done.”
Ease of use sold the retailer on the solution.
“Typically, when companies are examining their purchasing processes, they are coming from a manual paper-based environment or have other ERP (enterprise resource planning) packages that have been extended to manage the order process,” said Jason Hekl, VP marketing, Coupa. “Those can be inefficient and prone to error. Our solution is designed for this very scenario to allow the average employee to successfully place orders.”
The Container Store launched the cloud-based procurement solution in July 2009, starting with its local stores. It expanded its efforts to one market each week. By spring 2010, the solution was in place chainwide.
“Today, store managers no longer spend hours on the computer placing orders,” said Container Store’s Jones. “The solution has allowed our key personnel to maximize their time with our customers on the selling floor.”