Purpose of Practice
Reduce agency working capital Improve service levels to stores
Description of Practice
The Pennsylvania Liquor Control Board is in the process of implementing a vendor-managed, bailment inventory business model with its top volume vendors, representing approximately 80% of normal replenishment merchandise. The program includes both spirits and wine vendors. The vendors determine the inventory needed to meet service level requirements, arrange for delivery to one of the three DCs, while ensuring that inventory levels stay below mandated maximums. No bailment fees are charged, but penalties may be assessed if weeks of supply ceilings are violated or if sevice levels are below minimum standards. Weeks of supply limits and service level minimums are set for all items based on their velocity.
Success or Improvements
The program is still in its implementation phase, but we anticipate that we will meet our 80% of inventory target levels by the end of September 2012. Early results indicate that vendors are able to meet the service level targets while staying within the weeks of supply ceilings. Service levels on vendor controlled bailment items are currently slightly above historic PLCB performance.
Name: Glenn Zearfoss
Agency: Pennsylvania Liquor Control Board
Address: Northwest Office Bldg, Harrisburg, PA 17124