Network delivers for a leading grocery customer
A leading supermarket chain founded in Austin, Texas, wanted to reorganize their ordering and delivery operations, moving from a decentralized structure to a centralized global structure. This would help them reduce costs and improve their supply chain operations. With 487 locations across the US, Canada, and the UK, and 91,000 employees, this change in structure will be highly beneficial to the customer.
The Indirect Procurement team leader at the grocery chain needed to find a distribution partner that was strong in supply chain design and execution and had to accommodate local store service expectations.
This desired business model presented several unique challenges:
- The new business model had to take into account all aspects of distribution and transportation in the U.S., and Canada
- Regional business conversions had to be completed in a tight timeframe
- Four new Network distribution centers needed to support the new business model
Solution Development
Network developed a customized national distribution model that addressed the needs of the customer, while allowing flexibility to accommodate the unique needs of their local sites by implementing:
- A dedicated cross-functional implementation team, responsible for planning, managing, and executing the details of the new national program with the grocer
- New procedures to improve receiving dock flow at the stores, to reduce labor costs for the customer and Network
- A custom Web catalog, enabling the customer store staff to search and select products quickly
Phase one: established new distribution centers in the Northeast and Southern California.
Phase two: delivered the new distribution model to the Midwest and included distribution to the Midwest region and Canada.
Phase three: Addition of another new Network warehouse in the Northwest region, which included distribution to Western Canada.
Operational Improvements
Under the centralized program, the Indirect Procurement Team implemented a new “drop and go” receiving process. This reduced wait time and freed up dock space for other deliveries.
Operational improvements also extended to a consultative review of the grocer’s purchasing history and a manufacturer program review and product consolidation initiative. These efforts brought the customer cost savings and an optimized mix of products.
The Network IT team was able to create an online portal for a single, easy-to-use catalog that connected to their existing data, while allowing the customer to see images and descriptions of all of their products. This system also allows the customer to place orders at the “department” level, enabling better inventory management practices across the stores.
Lastly, Network developed an emergency response process for the grocer in the event their ordering system had an outage. The processes include the ability to send “push orders” to prevent out of stock issues, a comprehensive communication plan, checklist and more.
In Summary
Network drove critical business improvements, including:
- Total cost-of-ownership reductions
- Time and labor savings
- Ordering compliance nationally
- Better managed deliveries, and receiving dock efficiencies
- Emergency response processes and consistent backup procedures
The grocer reported the value gained from working with Network exceeded their expectations, making Network only one of two global vendors supporting the customer in this capacity.
Through the local expertise of our distributors, Network is able to deliver the right distribution competencies to meet the special needs of our customers. Our aim was to enable our customer to improve their operational model, so that they could spend more time in revenue generating work at the store level, while also improving the overall indirect spend management for the customer’s corporate procurement team.”
