Applying more than a third of a century of logistics experience with J.C. Penney Co., Rick Schart has, over the past nine years, helped Jacksonville, Florida-based Stein Mart Inc. realize tens of millions of dollars in annual savings while benefiting customers.
As Stein Mart’s senior vice president of supply chain and e-commerce operations, Schart continues to shape the supply chain of a specialty and off-price retailer with nearly $1.4 billion in annual sales – an increasing share of which comes online as opposed to via 290 stores in 31 states.
Indeed, the venerable company, which traces its roots to a department store opened in 1902 in Greenville, Mississippi, by Russian Jewish immigrant Sam Stein, simply did not have a modern supply chain when Schart was hired as Stein Mart’s vice president of supply chain in 2008.
Schart shares with American Journal of Transportation readers how he developed Stein Mart’s supply chain, as well as offers logistics career advice that anyone could profit from following.
How have you shaped the Stein Mart supply chain since coming aboard in 2008 following 34 years in logistics at JCPenney, and what benefits have been realized by Stein Mart and its customers?
Basically, we had no supply chain when I arrived. I was brought in after a consultant came onboard and looked across the company for opportunities to improve performance, and one of the first things they called out was, “Gee, you need a supply chain.”
Everything at that point was moving direct to the stores from vendors via parcel carriers – FedEx or UPS. The stores had to manually check everything in, double-count everything. We used no EDI [electronic data interchange], no automated receiving processes. Everything was manual.
Pretty amazing. Probably the only $1 billion retailer in the country that did not have a supply chain function at that time.
I actually knew the consultant. He and I had worked on a project at JCPenney, and he recommended me to the Stein Mart leadership team. That’s how I landed here.
I hired a team of supply chain professionals, and we embarked on a project to implement a traditional inbound consolidation network and outbound store DCs [distribution centers], so we ended up with three store distribution centers across the country – in the Atlanta, Dallas and Los Angeles markets.
We implemented EDI with our vendors, purchase orders and ASNs [advance shipping notices] and other transactions to improve the efficiency with vendors. We implemented a vendor compliance program to make sure they were shipping what we wanted when we wanted it.
We were able to bring about major savings in excess of $25 million annually, and a portion of that was in the store operations, because they no longer had to manually check everything in. All they had to do was scan cartons in and take it to the floor. And probably more than half the savings were in the economies of scale of the transportation network, moving products in truckloads across the country rather than paying parcel rates.
We set up delivery schedules to stores, so they no longer had 50 cartons showing up every day from UPS and FedEx. They had scheduled deliveries and knew what was coming.
The benefits to the company were the savings, obviously, and then we feel that the customers benefited because product was getting to the floor faster. And the savings allowed us to hold the line on customer pricing.
To that end, what have you applied from your vast experience at JCPenney, as well as your schooling, having earned a bachelor’s in distribution and economics back in 1975 from The Ohio State University Fisher College of Business?
The distribution degree set the stage. Back in the early ’70s, there were only a few schools offering such degrees. I learned negotiating principles, contract law and some basic inventory management skills. I learned about different modes of transportation, even though containerization was still back in its very early days.
As far as what I’ve applied here at Stein Mart, I would say 95 percent of that came from my experience and having lived through restructuring logistics networks at JCPenney, having done a lot of network modeling, to know where to put distribution centers, and then the technology to apply.
The education got me headed in the right direction, but the experience – and my team – is really what helped craft what we’ve done here at Stein Mart.
How has the Stein Mart supply chain been further honed since you added e-commerce to your title responsibilities in 2014, and what do you see for the future as – as I heard you say at a recent conference – personalization becomes an increasingly important driver?
I was asked to lead the launch of our e-commerce initiative here. I had experience from my JCPenney days. JCPenney was an early leader in online retailing. So I had kind of the back-end experience, such as order fulfillment and shipping, and hired the right people with front-end skill sets, like with websites.
From a supply chain perspective, we third-partied our arrangement initially for fulfillment and still are using that third party for e-commerce fulfillment, but we’re starting to move down the path of getting more sophisticated with a ship-from-store program we’re piloting this year. After that, we’ll do buy-online/pickup-in-store and other additional features and functions customers are demanding today, which really allow us to sell anything we have anywhere to any customer.
We’re behind most of the rest of the industry on this, but there’s some benefit of being a follower, in that the technologies are proven and are much easier to implement. Most of them are cloud-based today.
We’re really just starting to meld our retail bricks-and-mortar operation with our online operations, so that’s very exciting, with huge potential for us to improve sales and profitability.
As far as personalization, we do a lot of promotional activity, including emails with customers. The more personal you can make those, the higher your conversion rates will be.
As you look back upon your career, what do you see as your greatest achievement, and do you have any regrets?
Absolutely no regrets. I love my career. It’s kind of like the UPS commercial: I love logistics. Retail logistics is just so exciting, with so much going on and so much change, seeing over more than 40 years now how technology has come to play.
I guess my biggest accomplishment is what I’ve been able to do here at Stein Mart, taking all of those years of experience and being able to start from scratch with a blank sheet of paper and put together a network and a team. It’s a great team, and that’s probably my proudest accomplishment – the team we’ve been able to build here.
What key words of advice would you give someone now entering the field of logistics?
I’ve been a mentor for UNF [University of North Florida] logistics students for seven years now. I greatly enjoy that experience, every year having a new mentee to work with.
One piece of advice that I always give them is: “Never stop learning.” Today, I try to spend at least a half hour to an hour every morning when I get in looking at online articles about trends and new technologies. The ability to keep learning is just endless today. So that’s my No. 1 preaching.
The other one is that I always tell them, “Don’t let anybody ever outwork you.” That’s been one of my mantras throughout my career. “Going the extra mile” is one of my favorite terms.
I tell them that I’ve basically never asked for a promotion in my life. Any promotion I’ve received has been because of the results I’ve been able to produce.
What other interests beyond work do you pursue?
I’m on the board of an organization here called Communities In Schools of Jacksonville – a nonprofit that supports afterschool programs and school reading programs. Its goal is to reduce dropout rates and improve literacy. I spend time with them from a fundraising perspective and in going to visit schools. I get a lot out of that.
When I lived in Dallas [when working at JCPenney’s corporate headquarters], I spent a lot of time working with Habitat for Humanity. I haven’t caught on yet with a chapter here, but I plan on doing that as one of my retirement activities. I always enjoy going out and hitting nails on the weekend. To see someone get in a home who otherwise couldn’t have been in one is a rewarding experience.
I have four grandkids, back in Dallas unfortunately, and we try to get out and visit them as often as we can. Three of the four just spent a week here with us, and that was great.
Also, I do quite a few speaking engagements these days. I really enjoy sharing the knowledge and helping out different organizations, like JAXPORT, and this summer speaking at a National Retail Federation symposium to promote retail supply chain careers to some 200 college professors. I enjoy paying back a little bit.