Transforming Supply Chain Efficiency for a Major Retail Supermarket Company

THE CLIENT

A major retail supermarket company operating 117 retail outlets across Europe, offering a wide range of grocery and household products.

THE CHALLENGE

Our Enterprise Health Check assessment revealed an inefficient supply chain across the company’s Inventory Management System. Key challenges included:

Poor Supplier Performance: Inconsistent quality and delays.
Inadequate Transportation and Logistics: Inefficient routing and handling.
Lack of Supply Chain Visibility: Limited real-time tracking and collaboration.
High Staff Turnover: Leading to loss of expertise and continuity.

The estimated monetary losses due to these inefficiencies amounted to approximately €15 million annually, including costs related to stock-outs, excess inventory, and inefficient logistics.

ASSESSMENT

Lead Measures

Supplier Performance Management Initiatives:

Number of supplier audits conducted: 50
Percentage of suppliers enrolled in development programs: 40%
Supplier performance scorecards implemented: 60%

Logistics Efficiency Initiatives:

Number of transportation audits conducted: 30
Logistics partner performance management activities: 20
Transportation route optimization projects: 15

Supply Chain Visibility Initiatives:
- Data collection and sharing activities implemented: 25
- Collaboration initiatives with supply chain partners: 10
- Real-time tracking systems deployed: 5

Lag Measures

Supplier Performance Scores:

Average supplier performance score: 60%
Inventory turnover rate: 4 times per year
Stock-out incidents: 25% of total orders

Delivery Lead Time:

Average delivery lead time: 7 days
Inventory turnover due to efficient logistics: Increased by 15%
Stock-out incidents due to transportation delays: 20%

Supply Chain Visibility:
- Level of real-time visibility into the supply chain: 50%
- Inventory turnover rate: 3 times per year
- Stock-out incidents due to lack of visibility: 30%

SOLUTIONS

Enhance Supplier Performance

Implement rigorous supplier audits.
Develop supplier performance scorecards.
Initiate supplier development programs.

Optimise Transportation Logistics

Introduce route optimization software.
Conduct regular transportation audits.
Establish performance management with logistics partners.

Improve Supply Chain Visibility

Implement real-time tracking systems.
Foster collaboration with supply chain partners.
Enhance data collection and sharing activities.

RESULTS

Supplier Performance: Improved by 40%, reducing stock-outs by 20%.
Logistics Efficiency: Enhanced by 25%, saving €2 million in transportation costs annually.
Supply Chain Visibility: Achieved 95% real-time tracking, reducing stock-out incidents by 30%.

CONCLUSION

The transformation of the supply chain and inventory management system led to more efficient operations, better supplier relationships, and significant cost savings. The client was able to redirect the saved resources towards growth initiatives, positioning themselves as a leader in the highly competitive European retail market.

Note: The above values are estimated variables and are subject to change depending on the scope, volume, complexity, and unique circumstances of each client.