FRONTGATE AND BALLARD DESIGNS SLASH DROP SHIP COSTS WITH VENDORNET

VendorNet Payoff

• 111 % return on investment in less than 4 months
• Reduced labor requirements
• Up-to-date order status and exception reporting
• Improved customer service
• Reduced printing and mailing costs
• Online visibility of supplier performance

"Implementing VendorNet was an excellent business decision that has already gone beyond paying for itself. What is truly amazing is how smoothly the whole implementation process has progressed with the retailers and vendors alike. DirectNet Solutions has not only created a valuable product for any retailer and vendor in a drop ship relationship, but also backs up its expertise with a true commitment to helping its customers succeed."

Kent Martin, President
Cornerstone Services Group, Inc.

The Company

Cornerstone Brands Inc. is a leader in catalog, Internet, and retail marketing of high quality home, leisure, and casual apparel products. Frontgate, Ballard Designs, and a number of other fine retailers belong to the Cornerstone Brands family of companies. Where economies of scale can be achieved, critical warehouse logistics, distribution, and call center functions are provided by Cornerstone Consolidated Services Group, Inc. (CCSG), another Consolidated Brands company. Most recently, CCSG focused its attention on streamlining drop ship processes for Frontgate and Ballard Designs.

Based on this success, it will move forward to bring other Cornerstone Brand companies online with DirectNet Solutions' VendorNet system.

The Business Challenge
Inefficient and Redundant Manual Processes

Labor and Paper Intensive Drop Ship Process It is not always economically wise or feasible for retailers to inventory all offered products. For instance, customized house plaques from Frontgate and specialized furniture from Ballard Designs is shipped direct from the manufacturer. In fact, these two catalog stores combined have relationships with nearly 100 vendors. For both Frontgate and Ballard Designs communicating the order to the drop ship vendor and tracking status was largely a manual process, a process that was exasperated during peak shopping periods.

Kent Martin, President of CCSG explains, "We handle Frontgate and Ballard Designs' call center and order fulfillment functions. Before we implemented VendorNet, drop ship orders represented a very manual process consisting of printing the pack slips, overnighting them to the vendors, keeping spreadsheets and other paperwork to track the orders and reconcile them with the vendors and accounting functions. Plus, if the customer called and wanted a status, the only way we could give more than a best estimate based on standard shipping practices was to phone the vendor directly and then call the customer back. It was very labor intensive, very expensive, and quite inefficient."

The VendorNet Solution
Automate Supply Chain Collaboration With Suppliers

Drop Ship Automation DirectNet Solutions solved CCSG's drop ship challenge with its VendorNet system. CCSG did due diligence prior to selecting VendorNet. It considered nine different solutions and actually tested four. In the end, VendorNet represented the optimum choice. In addition to its rich feature/function set, it is compatible with Frontgate's and Ballard Designs' information technology infrastructure, has minimum requirements from a drop ship vendor perspective, and is competitively priced.

VendorNet has been integrated with the retailer's Ecometry-based host order management systems allowing the seamless transfer of drop ship order information to VendorNet, which then transmits the orders to the vendors via the Internet. Using a standard web-based browser, drop ship vendors simply access the order information, and return order status, shipping, and invoice information to the retailers.

Doris Kelley, Director of Business Systems at CCSG comments, "VendorNet has essentially created an electronic communication highway between Frontgate, Ballard Designs and their drop ship vendors. It's fully integrated with the backend host management systems allowing the bi-directional flow of critical order, shipping, and invoice information between these retailers, their vendors, and ultimately their customers."

Reaping The Benefits

VendorNet is saving Frontgate and Ballard Designs time, money, and manpower by eliminating the manual processes associated with drop ship orders. It has evolved the drop ship process into a cohesive business practice positively impacting order processing, shipping, invoicing, status and exception reporting, and call center operation.

Kelley elaborates, "We realized our payback on VendorNet in just 4 short months and have achieved a 111 percent return on investment which is just phenomenal. At peak time, we are able to operate with the same headcount and in fact, have not replaced an employee that moved on in her career. We also saved the significant expense of overnighting our pack slips. As we continue to bring more and more retailers and vendors online, the reduction in labor requirements alone will be significant allowing us to leverage these resources in other areas."

Cathy Ellerbrock, Senior Manager of CCSG's Call Center adds, "VendorNet has streamlined many facets of our job in the call center. All the information we need to track an order is available to us electronically. We can be more responsive to the customer by providing accurate information at the time they call rather than going through the tedious process of calling the vendor for order status and then calling the customer back."

Vendors for Frontgate and Ballard Designs are happy as well. Access to orders via the Internet has eliminated the time delay of waiting for orders to arrive by mail service. Orders get fulfilled quicker reducing the time to invoice and facilitating faster payment.

VendorNet's reporting feature also provides greater visibility to vendor performance allowing retailers to better manage the relationship for the mutual benefit of both parties. Further extending its supplier relationships, CCSG will soon be leveraging VendorNet Stock Purchase Order Manager to facilitate collaborative intelligence for hundreds of their bulk order suppliers.

Bottom Line

Martin sums it up, "Implementing VendorNet was an excellent business decision that has already gone beyond paying for itself. What is truly amazing is how smoothly the whole implementation process has progressed with the retailers and vendors alike. DirectNet Solutions has not only created a valuable product for any retailer and vendor in a drop ship relationship, but also backs up its expertise with a true commitment to helping its customers succeed."