Grocery Distributor Revamps its Entire Distribution Network

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Client / Industry

A grocery distributor servicing retail and wholesale accounts across Canada.

Scope of KOM International's Mandate

The client's infrastructure was comprised of five distinct operating divisions with eighteen distribution facilities delivering to customers in overlapping service areas. Due to rapid growth through acquisition, the client recognized that significant changes to its distribution infrastructure were required to remain competitive. Working with the client's national logistics team, KOM International developed an optimal national distribution network strategy to improve the company's competitive position in the Canadian market.

Critical Issues

• Ineffective distribution network requiring a more customer-centric approach
  
  
• Customer service
  

Objectives

• Optimize the firm's supply chain
  
  
• Reduce inventory levels
  
  
• Improve efficiency to reduce operating costs

KOM International's Recommendations

• Matched customers to most cost-effective distribution center regardless of operating division
  
  
• Centralized Perishables operations for receipt and handling to reduce costs and increase quality control
  
  
• Introduced Fast/Slow distribution networks where applicable
  
  
• Improved warehouse layouts and standardized warehouse operations to match productivity levels of the client's top performing warehouses
  
  
• Implemented combo-loading (i.e. multiple temperature products on the same refrigerated trailer) to increase trailer utilization and to reduce delivery frequency without sacrificing service levels or product quality
  
  
• Introduced cross docking for Direct Store Delivery items
  
  

Benefits

• 18 distribution centers reduced to 11
  
  
• 32% Reduction in the distribution operations cost per case broken down as follows:

Reduced transportation costs	32%
Reduced Warehouse Storage and Handling Costs	47%
Reduced Space Requirement	14%
Reduced Inventory Levels	7%
Total	100%

• KOM's recommendations for distribution network improvements are currently at various stages of implementation and additional