PetSmart’s new direct sourcing offices put the company closer to its vendors and improve its supply chain operations. By Chris Petersen
In today’s world of hyper-connectivity, where technology has made it possible for business to be conducted on a global scale from multiple disparate locations, there’s still something to be said for being able to stick close to your partners and have actual direct interactions with them. That’s something that PetSmart has discovered over the last year, as the leading pet supply retailer has opened new direct sourcing offices in Asia to improve product innovation and drive overall quality of the products it sources from its manufacturing vendors, as well as make significant improvements to the efficiency of its entire supply chain.
As Chris McCurdy, Senior Vice President, Global Supply Chain for PetSmart, explains, PetSmart’s Buying & Sourcing department launched a direct sourcing initiative with a new Direct Sourcing team last December opening a new global sourcing office in Hong Kong. That office was followed shortly after by another new direct sourcing office in Shanghai. McCurdy says the new direct sourcing initiative was launched with an eye toward improving the company’s relationships with its vendors in the region, as well as giving PetSmart greater control over the output of those manufacturing partners. In the past, PetSmart worked through intermediary agents to source its hardgoods products, but now the company has a direct connection to these important vendor partners.
“Because we now have direct sourcing offices in Shanghai and Hong Kong, we can have a more involved, direct and immediate interaction with our vendors versus through agents who worked with our Asian factories,” McCurdy says. “This new direct sourcing setup, which is for our hard goods products like collars, leashes, toys, beds, feeding bowls, etc., will allow us to innovate and expedite the design, production, order fulfillment processes and get products on shelf more quickly, since we are now closer to the source.”
McCurdy says the direct sourcing initiative is one more way in which PetSmart is working to realize its mission and become an even more trusted source for people with pets. “Our aim is to be a trusted partner to pet parents, helping them enrich the moments and their lives together,” he says. “As an enterprise, that means we must meet or exceed the needs of our pet parent customers and be relevant in the market. At the same time, we also need to be efficient in all of our processes, and direct sourcing is an underlying infrastructure that is allowing us to achieve it all.”
One of the biggest advantages the new direct sourcing model gives PetSmart is the ability to work closely with its suppliers to develop new products and maintain high quality throughout its hardgoods product lines. McCurdy says this will provide PetSmart with a substantial advantage when it comes to reacting to trends and maintaining high standards of corporate stewardship. “We will be able to innovate more quickly – such as jumping on a key trend – and be more directly involved in quality control activities and in social responsibility directives,” he says.
The direct sourcing model is crucial for PetSmart’s continued success because it places greater emphasis on its relationships with suppliers.
“We have always been a partnership- or relationship-based company,” McCurdy says. “We want to win with our vendors, and so we form strong working relationships with all of our vendors, whether they are manufacturing or service vendors. At the same time, we expect a lot from them and they have high standards for us.”
Needless to say, enacting such a substantial change within the complex mechanisms of an organization as large as PetSmart required a cultural shift, and McCurdy says that his team in global supply chain and the company overall has successfully embraced the changes thanks to the highly positive effects they have had on the company’s supply chain operations.
“Within the global supply chain organization, and really the entire company, we have a renewed sense of purpose,” he says. “We know that we need to be more rigorous in our approach to everything we do, and we are working hard to dig deeper to understand the data around every element of the business so we are well-informed and we can make the best decisions to drive our business forward.
“In addition, we are implementing new processes, hiring in new talent, creating whole new departments like the Direct Sourcing team and investing in our infrastructure so that we can continue to expand and grow,” McCurdy continues.
McCurdy says that next level is within PetSmart’s grasp, and the direct sourcing initiative and it implications on the global supply chain operation is going to be an important step in getting there for the immediate future, as well as the long-term vision. “In the short term, the direct sourcing initiative will help us get closer to our product source and generate efficiencies in cost and time so we can deliver better on our promise to be a trusted partner to pet parents,” he says. “In the long-term, the PetSmart Supply Chain team will continue to leverage our operations and layer in new technologies and processes so that we can become a strategic tool to enable continued company growth.”