As materials handling veterans say, it's best to build close relationships early with suppliers for success that lasts. Really!

Magid Glove & Safety Co. and Rite Aid Corp. couldn't be more different. One is a family-owned business with just a few facilities located in the Chicago area. Rite Aid, on the other hand, is a major personal care retailer with thousands of stores and many major distribution centers (DCs) across the country.

And when it comes to both companies' most recent improvements in distribution operations, the differences are just as marked. Magid renovated its three-story manufacturing facility into a new warehouse. Meanwhile, Rite Aid built a new 875,000 square foot DC.

Nevertheless, the two have a quite a bit in common, according to Wilson Lester, senior vice president of supply chain, Rite Aid, and Greg Cohen, operations manager, Magid. Both recommend building close relationships with materials handling suppliers to ensure maximum project success.

Although the two companies started in quite different places on their projects, both decided early on to find a new way to work closely with suppliers.

Cohen, a fourth-generation member of his family's business, started planning the retrofit while working as an outside systems integrator. He then left his consulting job to manage the implementation and operation of Magid's retrofitted facility.

"Someone at Magid needed to have the knowledge of both working with suppliers and of how all of the new equipment and systems were going to work," explains Cohen.

Rite Aid, on the other hand, planned to build multiple new facilities over a span of several years to consolidate and upgrade existing DCs, explains Lester. Because of that plan, the company negotiated contracts that set pricing and purchasing commitments with their materials handling suppliers for several years to come.

To preserve the base of knowledge and experience gained from one project to the next, Rite Aid developed an internal team to act as its own systems integrator, supplemented with outside engineering expertise on a contract basis.

"We were planning on multiple projects," says Lester. "So it was to our advantage to have one team go through the whole process on multiple occasions."

From those starting points, the two companies shared many common practices when working with suppliers.

Each company planned its facility in great detail prior to soliciting competitive bids from suppliers, building the foundation for good relationships by sharing information extensively and being specific about expectations.

Lester says Rite Aid developed simulation and prototyping programs to determine how to most efficiently process a wide range of goods. The group also made it clear to all potential suppliers that if they were selected for the initial project, and followed through on their commitments, those same suppliers would also be tapped for all subsequent projects.

"By building a relationship with all of our suppliers, we short-cut the competitive bid process and took as much as six months out of the schedule," says Lester.

Magid, too, invested a lot of time up front, analyzing the types of orders processed, how the system should work, and required throughput rates. The company's internal management team developed a detailed autoCAD drawing of what it wanted the finished facility to look like.

When it came time to select suppliers, both companies closely examined which suppliers had worked together previously and could demonstrate that their equipment and systems worked together.

"There was a desire to minimize interface challenges," says Frank Matunis, senior manager of engineering for Rite Aid.

Cohen agrees with that philosophy. "Our radio frequency (RF) systems, conveyors, and warehouse management system (WMS) already worked together in another facility that was up and running," he says.

Finally, both companies relied on their suppliers to help train their employees to operate and maintain the new systems and equipment. Using the same suppliers for the subsequent projects allowed Rite Aid to leverage existing internal management, maintenance, and operational resources, says Lester. The company began pre-training key maintenance and operational personnel long before the start of the second facility.

Since the two projects were quite different, however, Rite Aid and Magid didn't handle every aspect of their supplier relationships in the same way.

Because Rite Aid planned to build a series of DCs over several years, it was important for its team to formally document what worked and what didn't.

"We developed an entire lessons-learned document from our experiences building our Maryland facility and then applied it to the building project in Lancaster, California that was opened two years later," explains Mark Gullo, project manager for Rite Aid. "We then developed a similar document from our Lancaster project that we would use going forward to a future DC."

Rite Aid also left room to add to its facilities as requirements increase and more funding becomes available. The company deliberately installed only 80% of the total planned materials handling equipment. By working with suppliers to postpone some of the implementation until required, Rite Aid reduced its initial investment expense.

Magid also took its time in implementing its retrofit plan, but for different reasons. The company continued to use its facility throughout the entire project, requiring the equipment to be installed in phases. When the drive-in rack was installed, for example, the supplier installed one section and didn't return for a month—at Magid's request. The company needed to transfer product from the floor to the shelves to clear space for the next phase of the installation. Just as the company expected its suppliers to be patient with its schedule, Magid was patient with its suppliers as they worked together to solve issues that arose.

"Whatever problems came up, we wanted this project to be done right," concludes Cohen. "So if that meant it took an extra week, or an extra month, then it was important to take that time so we could be up and running to our maximum benefit from the beginning."

Both Rite Aid and Magid ultimately reaped the rewards of their very different facilities by building solid relationships with their suppliers on a foundation of collaboration and mutual trust, agree Lester and Cohen.