Background & Brief
Following discussions with a major retailer this manufacturer of branded food product was considering moving from a D1 for D3 order cycle to D1 for D2. The manufacturer’s supply arrangements provide good efficiency and there was concern that the change would have an adverse effect. SCALA was appointed to assess the impact and make recommendations.
The approach aimed to define the impact of the change on each relevant aspect of the supply activity, and started by analysing the existing deliveries into each of the retailer RDCs and developing a clear picture of delivery frequency, volumes and vehicle fill. The team then examined stock availability, delivery timings and backloading arrangements, and the timing of activities within the warehouse. This information was then used to quantify the impact of a shortened lead-time.
Benefits & Results
The review quantified the impact on (1) costs and service levels – warehousing, transport and inventory (2) set out a number of management and operational steps to be taken. It also set out a strategy for discussions with the retailer including a varying approach for some of the RDCs being supplied.
The manufacturer was able to engage constructively with its retail clients and implement improved service levels only where it made business sense to do so.