A top 5 food retailer with more than 500 stores, 75% of which are entrepreneurially run and 25% of which are branches, faced the challenge of improving the logistics performance of their Rural Fresh Distribution Center (DC).
With an ongoing integration process due to a merger and a planned review of the entire logistics footprint, the logistics costs of the Fresh DC increased significantly.
Distribution was handled by a logistics service provider, which required a complex interplay of stakeholders. Challenges and Approach To address the rising costs and logistical inefficiencies, we began with a quick-scan and performance analysis of the Fresh DC and transportation operations.
This allowed us to identify key pain points in the picking and transportation process.
Based on this analysis, we drew up a list of improvement initiatives aimed at optimizing these processes.
An important part of the project was intensive stakeholder management, in which we worked closely with business owners, headquarters and the logistics provider.
We simulated different scenarios for transportation planning and evaluated the impact of possible improvement measures.
Then the selected improvements were implemented, ranging from process changes and system design to communication optimization and project management. Results The implementation of the improvement measures resulted in a first step toward a market-compliant delivery frequency, involving both scaling down and expansion.
In addition, transportation costs decreased by 7.5% over budget, and the number of stops was reduced by 10%.
This also led to an improvement in shelf availability, which directly contributed to the operational efficiency of the stores.
Another important outcome was the optimization of the ordering and delivery schedule, resulting in a solid basis for periodic maintenance of these schedules.
Moreover, support was created among the various stakeholders, which was essential for the successful implementation of the changes and future improvements.
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