Vendors who are participating in the Bailment program are part of an exciting new initiative at the PLCB. Falling under the category of Collaborative Planning, Forecasting and Replenishment (CPFR), this program allows vendors to see all inventory and activity for their products and control the entire supply chain from the production of the merchandise to the point of delivery to the PLCB stores. Vendors can use this information to better manage their investment in inventory by using using forecasted customer demand to plan their production and re-supply plans. This allows the potential of significant inventory reduction by reducing the need for "just-in case" stock, and replacing it with "just-in-time" activity instead.
In the bailment program, vendors see forecasted store sales for 26 weeks, aggregated to the DC level, for each of their items. Forecasting is a collborative process between the vendor and the PLCB. The PLCB creates the initial forecast by store by week, and makes the forecast available to the vendor. The vendor is expected to review the forecast, apply their knowledge of item and market behavior, and have any needed changes incorporated back into the forecast. The vendor's supply chain group can then use this 26 week forward view to hone their production plans and to plan replenishment shipments to the PLCB. Vendors maintain ownership of their product until it is picked for shipment to the PLCB stores.
There is no per case charge to participate in the bailment program. However, vendors are exptcted to maintain their inventories within the maximum inventory parameters established by the PLCB. Guidelines are set by item velocity, and items are aggregated by velocity to measure actual weeks of supply. Vendors who exceed the maximum inventory guidelines for a velocity group are assessed a per case penalty payment for each week that the guidelines are exceeded. Vendors are also expected to meet minimum service level guidlines, as measured by case fill levels on shipments to PLCB stores. The service level guidelines are also aggregated by item velocity, and a penalty payment is charged for each week that the service guidelines are not met.
The terms and conditions for being a bailment vendor with the PLCB are incorporated in the bailment contract. A sample copy of the Bailment Vendor Contract form may be found at this link.