2005 Supply & Demand Chain 100 Case Study  Major U.S. Supermarket Chain / Infosys Technologies Ltd.

Profiles in Supply Chain Enablement: Retailer improves turns, reduces inventory by reengineering processes, implementing supply chain planning solution

Profiles in Supply Chain Enablement: Retailer improves turns, reduces inventory by reengineering processes, implementing supply chain planning solution

Company: Major Supermarket Chain (U.S.)
Company Size: Large
Company Sector: Retail
Area(s) of Enablement: Order/Demand Capture, Fulfillment/Logistics
Enabler: Infosys Technologies Ltd. (Bangalore, India)

SDCE 100 2005Case Study:This large, U.S.-based retail chain was looking to streamline its supply chain operations by evaluating and improving its supply chain metrics and systems and developing a solution strategy to achieve its supply chain vision. This company was facing issues with inventory management and service level, and they wanted to reduce inventory and improve service levels throughout their supply chain network by improving forecast accuracy and enhancing supply chain planning.

The company engaged with Infosys Technologies to assist in the supply chain-improvement initiative. A provider of consulting and IT services to clients globally, Infosys conducted a supply chain assessment exercise and helped the retail chain define future-state supply chain processes. Infosys also helped the customer, as part of this exercise, in selecting the right set of planning and execution tools to enable the defined processes. In addition, Infosys helped the retailer define an implementation road map to phase in the deployment of the various business and IT initiatives to enable the vision. The process vision was based on a time-phased planning process construct.

As a part of the solution selection exercise, Infosys helped the client with a detailed application vendor evaluation exercise whereby various supply chain planning and execution vendors were evaluated for fit. Based on the selection exercise, a supply chain planning solution vendor was selected, and Infosys then helped the client implement the supply chain planning application in a phased manner.

Implementation and Results

The first phase of the project involved implementing the tool at the warehouse for a limited scope of items. Subsequent phases then rolled out the tool to additional items and warehouse locations. Infosys was also involved in helping the client implement the planning tool at stores for a limited set of items in a pilot mode.

The defined processes helped the client in improving forecasting accuracy by using better techniques and in balancing demand and supply with improved information flow and reduce inventory. The return on investment in the project came in the form of:

  • Increased inventory turns and reduced inventory at the warehouse due to time phased planning.

  • Improved service levels.

  • Improved forecast accuracy for a majority of the SKUs, especially during promotional periods, by applying a high level of mathematical rigor, configuration of user interfaces and development of utility applications to capture promotions.

  • Qualitative benefits, such as ease of use of the system for the planners, allowing them more time to focus on other value added activities
Improved supply chain results started accruing within the first two months for all the planned SKUs, according to Infosys.

The first release for warehouse planning went live after eight months. The second release, with increased scope, was implemented in a six month time frame. Currently the planning solution is being extended to the retail stores in a phased manner, starting with a few stores and select SKUs.

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.