UK grocery multiple

Retail network strategy

Summary

LCP has been retained on multiple occasions throughout this period to undertake detailed network analysis and help determine the future supplier, inventory storage and retail store distribution strategy for the business.

Project Background

As an ongoing capacity review, Grocery Multiples in particular (due to scale of operations) need to constantly review their Network Strategy and means by which they can flow product more efficiently to store.

Approach

Projects have varied in terms of complexity and scope over the years but have tended to follow a structured process:

• Work with business (trading and merchandising) teams to produce and sign off five year forecasts to allow the development of a logistics plan base
• Segment the logistics plan base into like category of products and typical routes to market, in order to undertake the network strategy development
• Model the current network against potential scenarios
• Produce cost and service forecasts and make recommendations for change

Where appropriate:
• Undertake detailed DC design - typically with some automation component and time based constraint
• Create tender documentation for a new DC and support supplier selection

Underpinning the process above has been LCP's rigorous data analysis and Network Modelling Tools, including Simulation of Distribution Centre and Transport Operations.

Client Testimonials

LCP has enjoyed a very long standing relationship (over a decade) with this Grocery Multiple Client.

Success Factors

Given the dynamic nature of the market and trading environment, one of the biggest challenges facing LCP has been to capture the multi-faceted dimensions of the business and represent these in a relatively simple and coherent manner, through which Senior Management are able to be guided and take clear decisions.

Results and Benefits

In all cases LCP has been able to demonstrate the complex warehouse and transport trade-offs that need to be balanced, resulting in:
• Capital deferment - through the ability to better utilise existing network capacity
• Transport optimisation - through improved load balancing, route scheduling and daily timing of deliveries
• Creation of Operating Budgets and KPIs for the revised networks used as the operating benchmark for the business
• Introduction of new ways of working
• Development of specialist automated solutions to increase productivity in key areas of the business (trading categories) to meet growth expectations.