CASE STUDY 1

Optimizing Supplier Universe and Supply Chain Management for a Multi-City Sweet Shop Chain

Client Overview

The client, a beloved sweet shop chain, operates 30 stores across five major cities. Renowned for its artisanal confections, the company enjoyed rapid growth. However, this expansion brought significant challenges in managing a fragmented supplier universe and an inefficient supply chain, impacting their ability to maintain product availability and control costs.

Challenges

  1. Fragmented Supplier Universe:
    • Diverse Suppliers: The client relied on a wide range of regional and local suppliers, each with different delivery schedules and terms.
    • Inconsistent Quality: Variation in product quality and delivery times caused inconsistencies in the sweet shop’s offerings.
  2. Supply Chain Inefficiencies:
    • Disjointed Operations: Lack of central coordination resulted in duplicated efforts, redundant processes, and inefficient stock management.
    • Stock Imbalances: Some stores faced frequent stockouts while others had surplus inventory, leading to wasted resources and lost sales.
  3. High Costs and Delays:
    • Expedited Shipping: To cope with supply chain disruptions, the client often resorted to expensive expedited shipping.
    • Emergency Orders: Unplanned purchases due to stockouts added to operational costs and disrupted normal supply chain flows.
  4. Limited Visibility:
    • Lack of Real-Time Data: The absence of integrated systems meant the client struggled with poor visibility into inventory levels, supplier performance, and overall supply chain health.

Objectives

  • Consolidate Supplier Universe: Streamline and rationalize supplier relationships to improve consistency and negotiation power.
  • Optimize Supply Chain Management: Enhance efficiency through better coordination, real-time inventory tracking, and cost control.
  • Improve Cost Efficiency: Reduce reliance on expedited shipping and emergency orders through better planning and forecasting.
  • Increase Visibility: Implement systems to provide real-time insights into inventory, supplier performance, and overall supply chain status.

Solution: Consulting Engagement

BlitzGro was engaged in addressing these issues with a comprehensive strategy:

  1. Discovery and Analysis:
    • Supplier Audit: BlitzGro conducted a thorough audit of the client’s existing suppliers, assessing performance, reliability, and cost-effectiveness.
    • Supply Chain Mapping: We mapped the entire supply chain from suppliers to end-users, identifying bottlenecks, inefficiencies, and areas for improvement.
    • Stakeholder Interviews: Interviews with key stakeholders, including store managers and procurement staff, helped pinpoint pain points and gather insights.
  2. Strategy Development:
    • Supplier Consolidation: BlitzGro recommended consolidating suppliers to reduce complexity and enhance negotiation leverage. We identified key suppliers that could meet the client’s needs more effectively and negotiated better terms.
    • Integrated Supply Chain System: We proposed implementing a centralized supply chain management system to provide real-time inventory tracking, demand forecasting, and streamlined order processing.
    • Process Optimization: We developed new processes for inventory management, including just-in-time ordering and automated reordering systems to minimize stock imbalances and reduce reliance on expedited shipping.
  3. Implementation:
    • Supplier Transition: Assisted the client in transitioning to a smaller, more reliable group of suppliers. This involved renegotiating contracts and establishing new delivery schedules.
    • Technology Integration: Implemented an integrated supply chain management platform that provided real-time data on inventory levels, supplier performance, and logistics.
    • Training and Change Management: Provided training for staff on the new systems and processes to ensure smooth adoption and effective use.
  4. Monitoring and Optimization:
    • Performance Tracking: BlitzGro established key performance indicators (KPIs) to monitor the effectiveness of the new supply chain system and supplier relationships.
    • Continuous Improvement: Scheduled regular follow-up meetings to review performance, address any issues, and make adjustments as needed to continuously improve the supply chain.

Results

  1. Supplier Universe Optimization:
    • Reduced Supplier Base: Consolidation led to a 30% reduction in the number of suppliers, simplifying procurement processes and improving consistency in product quality.
    • Better Terms: Negotiated improved terms with key suppliers, reducing costs by 12% and ensuring more reliable delivery schedules.
  2. Enhanced Supply Chain Efficiency:
    • Improved Coordination: The new supply chain management system streamlined operations, resulting in a 25% reduction in stock imbalances and a 20% decrease in expedited shipping costs.
    • Real-Time Visibility: The integrated system provided real-time insights, enabling proactive management of inventory levels and supplier performance.
  3. Cost Savings:
    • Reduced Operational Costs: The optimized supply chain processes and better supplier terms led to a 15% reduction in overall operational costs.
    • Minimized Emergency Orders: Improved forecasting and inventory management reduced the need for emergency orders by 40%, further cutting costs.
  4. Increased Scalability:
    • Support for Growth: The new supply chain model provided a scalable foundation, allowing the client to manage future expansion more efficiently without compromising service quality.