McLane Company is an important customer for many food and beverage brands, who use its supply chain services to get their products to grocery, drug and convenience stores. At Alloy, we’ve worked with several suppliers who rely on McLane to distribute its everyday products to key retailers. They all wanted to gain a better understanding of what’s happening at McLane to properly supply this key channel and shorten response times to changes in customer behavior.
With visibility into McLane’s inventory and shipments, brands can better predict orders and adjust production as needed to fill them. If you can connect it to what’s happening at the retailers in terms of point-of-sale and store inventories, you can even help the distributor identify areas where orders are not aligned to end consumer demand or other issues with ordering systems. McLane typically doesn’t monitor this data, so their orders and distribution don’t take into account the valuable insights from it.
For example, one of our customers spotted a problem where McLane’s upcoming orders weren’t accounting for the quantities the brand had to short in past orders. That meant McLane didn’t have enough inventory to cover retail positions. A correction not only helped increase sales, but also ensure store shelves eventually got re-stocked.
Conversely, because of its role as an intermediary, distributors like McLane can obscure issues like spoilage. We’ve seen massive inventory buildup at retailers supplied directly as well as through McLane because the two channels were disconnected. Product was still being sent to locations that were already stuffed. Again, connecting the dots in the supply chain can help identify and prevent these problems, whose costs often ultimately fall back on the brand.
McLane does provide a lot of transparency into their operations that can help. They share granular data on their inventory, as well as what’s coming in and going out of their divisions. There may be fees associated, but more problematic is that the reports come in a few different formats and files. You’ll need to stitch it together before you can integrate it with other data to form that complete picture of your supply chain.
We’ll review each of these sources and what they provide, while touching on some of the complications when trying to map it all together.
Suppliers can receive a daily (weekdays) email from McLane with a zipped file containing several reports, including one with stocks and flows out of their network that day. For each of your items and each division that manages that item, the spreadsheet provides:
Although the metrics are intuitive, there are a few details that can make it challenging to properly interpret McLane’s data. First, the numbers are aggregates across all retailers, so from this file you can’t tell how McLane has or will allocate inventory to each of the retailers it services. Units are also in terms of what McLane calls a “pack” after they have repacked your shipment, so you need to do a conversion to make sense of it in terms of your own units of measure. Finally, a “McLane week” goes from Friday through Thursday. Keep this nuance in mind for the week-to-date and remaining week numbers if you think of a “week” differently.
McLane is similar to many trading partners in providing data in a language unique to them along these three dimensions – network, product and time. These are the differences that make up a partner’s particular “language” and you have to “translate” and model to make sense of as part of your larger supply chain network.
This report is great in that it offers daily granularity, unlike a weekly report that can easily mask issues. The trade-off is that each report is only a single snapshot in time. If you want to understand how inventory levels are changing over time to help identify trends, you would need to aggregate many of these files together and could easily run into Excel size limits.
Complementing the report on outbound flows, the zipped file also contains a detailed spreadsheet of what McLane has ordered and received from you. It breaks things down at the PO level, including:
You have a lot of this same information in your own ERP, like the PO details. You should also be able to see in your ERP how many units were sent, the date they were sent and maybe when they’re expected to arrive, which should match with the units received and receipt date. Of course, anything from shipping delays to goods damaged in transit to incorrectly labeled boxes could cause discrepancies. This report enables you to confirm actual receipts for further order visibility, as well as gather data on actual lead times to help with planning.
In matching up POs with your ERP, one complication is this spreadsheet only uses McLane item numbers to refer to items. If your internal data uses a different internal product identifier, that’s another translation you’ll have to do.
As we’ve already called out, the report on division inventories and movements doesn’t show exactly where McLane is sending inventory. If they’re servicing multiple retailers, that means you lose important insight into your performance at each of them and opportunities for business development.
The good news is that suppliers can get that level of detail from McLane; the bad news is that it comes in yet another report. It shows the specific amounts that McLane sent to each retailer from each division, plus you can access a database with outbound shipping information to over 38,000 retail locations. You’ll gain visibility into each shipment of your products out of a McLane division, including its final destination, to help you identify trends and gaps among retailers.
What’s more, this data provides what you need to identify the relationships between McLane divisions and individual stores, so you can trace how items move through your supply chain. You have to model all the ship from and to locations to determine the shipment lanes, but once you have that multi-tier network mapped, it’s incredibly powerful because it makes your supply chain insights actionable.
Say you notice McLane isn’t servicing Walgreens stores in the Northeast well. You can’t take that insight to McLane until you know which division(s) service them and their corresponding buyer(s). That buyer likely won’t do anything unless you can lay out an actionable plan, specifying how much they should order and how much of it should be distributed where – all in McLane language and justified based on Walgreens POS and inventory levels, of course. Making such a specific recommendation correctly necessitates a clear understanding of their network.
For years, Alloy has been ingesting data from McLane for our clients. We already have models for integrating these three different sources and harmonizing it with data from your ERP and retailers. You can take advantage of our pre-built platform and unlock new insights without having to wade through the data yourself.
The global confectioner mitigates waste, improves service levels and controls costs by connecting digital supply chain visibility with POS analytics.
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