Case Study
Leading International Grocery Retailer Improves Distribution Center Asset Utilization, Reducing Operating Costs by 10% and Delivering 400% ROI
10%
Operating Cost Reduction
Strategic Imperative
To develop and rapidly implement a new operating model that improves reporting accuracy, cost predictability, and overall process performance while providing functional performance metrics and controls across three distribution centers using different transportation modes
Client Background
- 140-store Western Canadian division retail network served a broad market with complex grocery replenishment and transportation requirements
- Scope covered transportation operations across three distribution centers supporting replenishment throughout the 140-store network
- Each location used a different transportation mode, creating distinct cost structures and asset requirements
- The network’s broad service area increased pressure to balance transportation economics with reliable store fulfillment
- Leadership needed stronger cost predictability and asset utilization to protect distribution efficiency and retail service performance
- Executive management struggled to determine the most economical transportation mode across the network’s three distribution centers
Key Issues & Barriers
- Organizational goals and objectives were unclear, weakening accountability for transportation cost, service, and asset-utilization performance
- Distribution center transport departments used existing systems inconsistently, preventing standardized management of network performance
- Poor data collection and report design produced inaccurate transportation reports, hindering evaluation of costs and mode economics
- No comprehensive daily management process existed to identify, evaluate, and control key transportation cost drivers
- Equipment utilization lacked a standardized cross-location measure, preventing reliable comparison and asset deployment decisions
- Vendor management and selection lacked a formal process, weakening rate discipline and transportation economics
Key Implementation Components
- Standardized transportation reporting to improve accuracy and support consistent cost evaluation across distribution centers
- Implemented a comprehensive daily management process to identify, evaluate, and control key transportation cost drivers
- Developed best practice transportation processes to standardize system utilization, vendor management, and execution across distribution centers
- Introduced asset-utilization measurement tools to compare equipment performance and deployment across locations
- Established comprehensive functional performance metrics and controls to strengthen cost predictability and continuous improvement
Benefits & Results
10%
Operating Cost Reduction
6%
Distribution Center Asset Utilization Improvement
400%
Return on Investment