SCALA CASE STUDY

Retailer-Supplier Collection – Opportunity Assessment

Top 4 UK Supermarket

Background & Brief

This to 4 UK retailer already had various arrangements with suppliers to collect from their sites. However, they wanted to understand the potential opportunity that could be achieved by changing arrangement with suppliers between supplier delivery into DCs and potential retailer collection arrangements.

Project Approach

  • A comprehensive analysis of all orders placed on ambient suppliers over previous year
  • Breakdown by receiving DC and quantification of pallet equivalents
  • For those collected by Retailer an evaluation of commercial arrangements that were applied and benchmarking versus SCALA industry standards based on supplier location and receiving DC
  • For those delivered in by Suppliers an assessment of the supplier cost based on SCALA industry standards
  • The approach included discussions with the retailers logistics teams, the 3PLs currently involved and a sample of suppliers – both on collection and delivery arrangements

    • Benefits & Results

  • Quantification of significant potential cost benefit opportunities by extending the retailer collection operations
  • SCALA recommended a change in the commercial arrangements for collections
  • SCALA provided the recommended a rate matrix charging arrangement – that would provide mutual benefits
  • However, the retailer had to ensure that it built up a solid reputation for reliability of collection including through peak trading

    • Final Outcome

    The changes in commercial arrangements were put in place and the retailer actively pursued the collection policy
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