Retail grocery chain reduces distribution costs with improved asset utilization measurement and control

Distribution centers reduce operating costs by 10%.
Project yields 400% annualized ROI.

Strategic Intent

Develop and rapidly implement new operating model addressing issues of report accuracy, cost predictability and overall process improvement, delivering functional performance metrics and controls

Situation

Leading international grocery retailer
140 retail stores in western Canada
Three distribution centers (DCs) serve wide area
Each DC uses a different transportation mode
Executive management frustrated by inability to determine most economical mode of transportation

Issues and Barriers

Difficulty evaluating transportation costs due to poor data collection and report design
No consistent utilization of existing systems across DC transport departments
Transportation reports contain inaccuracies
Lack of clarity and understanding across the organization regarding goals and objectives
No common measure of equipment utilization from location to location
Lack of formal approach to vendor management and selection

Key Implementations

Standardized and accurate transportation reporting process
Comprehensive management process focused on identifying and evaluating key cost drivers and decisions on a daily basis
Best-practice driven processes to assure consistency and standardization
New set of tools for measuring asset utilization
Comprehensive performance metrics to drive sustainable improvements

Results

Key Strategic Results

R_W-CS2

At the conclusion of our engagement, a consistent and robust system for managing has been fully implemented across DCs and transportation management staff. As a direct result of this initiative, the client realized these improvements:

10% reduction in overall operating costs within the DCs
6% gain in DC asset utilization
400% annualized ROI on Brooks engagement

Client Perspective

Brooks International helped us better understand and evaluate our transportation operations and has laid the foundation for continuously lowering our transportation costs.
—Chief Financial Officer