Retail case study
Case Study
How a mid-market grocery store supplier saved thousands of hours of manual labor while trimming freight costs by 15%.
Goals
- Provide full visibility throughout the entire logistics chain
- Assess competitiveness of ocean freight and domestic trucking rates
- Create a scalable digital solution to reduce reliance on people to perform redundant tasks
Approach
- Digitally integrate external partner network data with internal operations
- Analyzed and renegotiated ocean freight and domestic trucking contracts
- Implement an order management solution to remove uncertainty with suppliers while providing visibility across the organization on when an order was accepted, in production, and ready to ship
Results
- 15% cost savings in ocean freight as well as domestic trucking
- Eliminated thousands of hours on an annual basis of process redundancies
- Full visibility across all elements of the company’s supply chain with a single source of truth that’s scalable
The Situation
The next time you hit the grocery store, consider this: Someone is behind those branded reusable shopping bags and reusable boxes we’re all so accustomed to. In fact, chances are you’ve encountered this grocery store supplier’s products without even realizing it.
Headquartered in Canada, this business produces branded and reusable grocery bags and containers for many of the top grocery store chains across North America, with offshore production in Asia.
The grocery store supplier had a system in place, but they were the first to admit it wasn’t a great one. Their skeleton ERP only focused on financial operations, like entering purchase order details and issuing invoices, while the rest of their actual logistics data was housed in a shared spreadsheet document.
Given that everyone from sales to logistics to accounting would contribute to and need information from the spreadsheet, it was of paramount importance to the business, so much so they had two full-time dedicated resources managing it.
But the grocery store supplier realized they were putting their operations at risk by relying on a single document. If the spreadsheet was compromised in some way – like a corrupted file or ransomware – they’d have zero visibility into the status of any piece of their supply chain and orders. And as with any manual process, the spreadsheet was prone to the occasional error.
The ask to Orkestra was clear: How can we possibly scale up without adding more human resources at this identifiably vulnerable resource?
The Solution
Orkestra’s primary objective for the grocery store supplier was to provide clear line of sight throughout their entire logistics setup, for anyone in the organization.
But before the company got there, Orkestra smoothed out a few other pressing issues. First, with all efforts going toward management of the spreadsheet, little attention had been paid to whether the grocery store supplier even had the right partners in place.
Orkestra stepped in on a 4PL consultative basis to identify whether the grocery store supplier was getting fair market rates for their ocean level freight, and it quickly became apparent they were paying well outside of market. The next step was to take responsibility for selecting a new alternative freight supplier, coordinating shipments, and negotiating rates.
The second challenge came when the grocery store supplier’s items arrived on shore. They operated what’s known as a cross-dock function, where they’d unload their cartons right on the ground at third-party warehouses, unpack them, then rebuild them on pallets to be shipped to the end users. But what was happening in these warehouses was a black hole; there was no visibility into how many cartons from each container were unloaded, when, and how quickly they’d be delivered to customers.
For this issue, Orkestra implemented a new tracking system with carton labels that were applied at the manufacturing stage to each carton, that were subsequently scanned by warehouse employees upon arrival, requiring training and implementation on both ends of the company’s supply chain. For the first time ever, the grocery store supplier had carton-level traceability.
The final shift for the grocery store supplier was revisiting their last mile delivery partners. The company had traditionally partnered with smaller local carriers, but found that like the warehouses, they were missing out on key tracking information. Orkestra implemented a deal with a large domestic partner carrier, including organizing and arranging trucks with the carrier, to give the grocery store supplier the visibility and control over their logistics process they needed.
The Success
Renegotiating the ocean freight and domestic trucking carrier rates netted the grocery store about 15% in cost savings each.
In addition, moving away from the manual spreadsheet entries and into automation has saved the business thousands of hours of labor per year, not including inquiries from others that needed information from the spreadsheet who can now access Orkestra’s platform on their own, anytime, from anywhere.
Grocery chains are concerned with a metric known as On Time in Full (OTIF). Companies with better OTIF scores receive more or new business, while those who fail to hit targets are penalized or even fired.
Orkestra’s platform, complete with carton-level execution control and 4PL operational support, allowed this grocery store supplier to perform at an exceptionally high OTIF level, securing their position as a preferred, trusted vendor.
The Summary
This story is a powerful example of how even mid-market businesses can benefit from taking a closer look at their supply chain. When the grocery store supplier realized their approach wasn’t scalable nor secure, it became obvious they needed a better solution. Orkestra was not only able to deliver the visibility and scalability the company was looking for, but they also streamlined operations, cut costs, and ultimately contributed to a better end-user experience.