Direct Store Delivery Optimization
The client was a provider of consumer food products, mainly via a regional DSD system, but also shipped products via customer equipment and used distributors. The client desired to develop a recommendation for how to leverage the DSD system to maximize competitive advantage in the marketplace, while operating at a lower cost structure. Our job was to assess the total DSD system, from plant to store, against best practices. We were asked to identify short and long term improvement areas for revenue and cost savings, quantify those savings, and develop a path to capturing the opportunity.
ILLUMINATE
Extensive fieldwork was done inclusive of sales route delivery ride-a-longs, employee interviews, and plant/distribution center observations. Processes were observed to compare to best practices. Extensive data analysis was conducted to identify system costs, and to quantify potential impacts of changes to labor, fleet, fuel and facilities. In-store impact was considered and revenue generating opportunities were identified.
NAVIGATE
We take projections seriously and invested time with the client in reviewing data, assumptions and potential impacts. Historical approaches and decisions were considered, and a solid understanding of the client’s culture and resource capabilities shaped recommendations. Gross margin improvements were finalized based on a realistic perspective of implementation across a 12-month time frame. Finally, we created a refreshed view of the value of the entire system and the role the system played in sustaining competitive advantage for the client’s brands.
ACTIVATE
We identified 14 opportunities across 4 improvement areas. The opportunities were prioritized based on potential financial impact, complexity, and time to financial realization. The assessment and recommendation were delivered with specific path forward steps for each of the opportunities.
Results
Short-term margin improvements produced a project ROI of 4:1, while long-term projections created a 12:1 payback.
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