Professional Ace

Picking up home essentials is easy to do at AC E Hardware because they are on
top of their supply chain management. Meaning you’re essentials are in stock.

Gillian Lewis, Logistics & Inventory Manager, ACE

If you ran into Gillian Lewis in the grocery store, you might never guess she was Logistics & Inventory Manager for ACE hardware. In fact, judging from her baby-blue eyes, blonde ponytail and soft face, you might assume she was your average Dubai newlywed, more concerned about babies and dinner parties than hammers and nails.

But once she opens her mouth, you know Lewis is in the right job. The Northern Ireland native, who formerly worked with Sainsburys grocery store and general merchandise retailer Woolworths in the UK, clearly understands the science of supply chain. “Our business at ACE has really changed since I arrived. We didn’t have a logistics manager before,” she says calmly.

“Because we didn’t really have a very good supply chain, people used to order once every six months, so we would get in stock and then get out of stock. Our supply chain from America was very ‘hit and miss’. We might get a load of stock and then not get any for months.”

But Lewis is changing all of this. “My job has been to smooth out the supply chain so we’re receiving product little and often, reducing our stock holding and improving our stock turn,” she says. “We’ve started to order little and often, and have developed a very strict ordering schedule and formula we use to place orders.”

And she follows this formula like a science. “We work out how much product we want to order per vendor, how much stock we’ve currently got and how much we have on order,” she explains. “Then we work out our rate of sale per month, determine if we want to keep two or three months cover, and decide what our lead time is. From that, we work out what we need to order and round it up to case packs or pallets, depending on how we want to ship the products.”

So far, this strategy is a success. “Between a year ago and now our availability has improved 10-fold,” she says.

But Lewis wants to take the ACE supply chain to the next level, with the help of software provider SAP. “We’ve been doing a lot of work on SAP and improving the way we use it,” she explains. “Previously, we were not using it very well. SAP has got so much information and so many factors to it, that it can be very useful.”

This, she says, will reduce her team’s workload. “We’re working on an automatic replenishment formula, so instead of manual calculations on a spreadsheet, we just click a button that works out all the necessary formulas. You can plan up to full container loads to make sure you’re using the space in a container efficiently,” she says.

“I want to get to automatically ordering everything, including our minimum order quantities and ordering of case packs and pallets, so when product arrives in our GAC warehouse in Jebel Ali, it’s easy for them to receive the stock and it’s easy for them to put it away.”

She is also working with GAC to make their software compatible. “At the moment, GAC uses its own warehouse management system, but we’re going to implement SAP’s warehouse management system there,” she explains.

ACE and GAC’s current programs do not always mesh, elaborates Lewis. “They’ve got their system and we’ve got SAP. That means GAC has to update two systems and mistakes can happen. It can be a bit of a pain.”

“Soon, we’re going to just have one system,” she adds, positively. Proper ordering will also make life easier for GAC. “We received a pallet from a vendor the other day that maybe had five different products on it, so GAC had to strip down that pallet and take ages to check it and repack it and decide where it was going to go, based on its size,” says Lewis.

“What I want to do is, based on the rate of sale, order full layers or full pallets of product, so it’s easier for GAC to check the product and put it away; and get the vendors to send pallets that fit into our locations.”

She says she has to be tough to encourage vendors to pack accordingly. “I want to get to a position where everything comes in correctly palletised and correctly sorted, so the time it takes to receive a product will be greatly reduced. But we’re not there yet. We’ve got a long way to go.”

She says ACE doesn’t yet have the clout of her former employer, Woolworths, which receives its pallets completely sorted. “There’s only one way and that’s their way,” she says. “If the vendor doesn’t deliver the way they want them to deliver, then they just say ‘Sorry, we either fine you a huge amount of money, or else we reject you.’”

But ACE is starting to follow Woolworths’ example. “The only way vendors are going to learn is if we dictate our terms,” she says. “If they don’t do it our way, we fine them. If they don’t supply us with bar codes, we fine them.”

GROWING Lewis says her team has had to step up ACE’s supply chain to keep up with the store’s expansion. The Al Futtaim-owned chain has branches on Sheikh Zayed Road and Bur Juman in Dubai, as well as the monstrous store in Festival City, which opened in May, 2006. It also has stores in Sharjah and Abu Dhabi, “Our supply chain has had to change to accommodate a doubling of our sales growth,” she explains.

The store now offers 35,000 products, which it orders from ACE suppliers in China and the United States, as well as independent international vendors. “Before we opened the Festival City store, we had about half of that,” says Lewis. “We brought in a lot of new ranges that we had never sold before.”

She says the company has a unique organisational structure. “We are part of that ACE cooperative, which means we have to buy a certain amount of product from them per year. But it also means that if ACE does well, we get part of the profits back.”

And the American ACE supply chain is, well ‘ace’. They have something like a 99 percent service level in their distribution centres,” says Lewis. “I’ve been to a few of their distribution centres and you could eat your dinner off the floor.”