A Food Service Distributor Realizes Tremendous Savings in Distribution Costs
Client: Major distributor of food services.
Challenge: Redesign its supply chain network and lower logistics and operations costs.
Solution: We modeled exisiting and future networks, and then the proceses and business requirements were developed.
Results: The supply chain was redesigned, and a supply chain management team and metrics were created to ensure the chain continued to adapt and function after the project ended.
A major distributor of food services partnered with us in a multi-year engagement to redesign its supply chain network and lower logistics and operations costs. In addition to delivering near term cost savings, the new network design and supporting application architecture will also allow the company to more quickly and effectively integrate and assimilate acquisitions and new lines of business in support of corporate growth strategies.
Approach
Initially, we worked with the client to model the current distribution network and determine cost structures associated with the company’s regional business volumes. Future-state modeling and sensitivity analysis followed, which provided direction on savings opportunities and performance characteristics of future network designs. Once the future network design was established, the team designed new regional and network-oriented business processes and developed business requirements for software to support the new processes.
Although the primary focus of the initiative was improved operational performance in the main line of business, the enhanced business and application architecture provides important capabilities that can be leveraged across other lines of business:
• Centralized capture and control of orders across multiple channels and suppliers
• Dynamic, rules-based routing of orders through most efficient fulfillment path
• Network level visibility of demand, inventory, orders, and logistics activities
• Scalability to meet growing business volumes
Results
Planned outcomes of the first-phase implementation are:
• Regional distribution facilities, operational processes, and supporting organizational design
• Metrics framework to track and analyze cross-functional supply chain costs
• Newly created Supply Chain Management team to model and design the supply chain network
• Supply Chain Application Architecture supporting network-level supply chain management activities
• Increased supplier and partner integration