How to Win the Beverage Supply Chain Challenge

Food & Beverage, Lean Guiding Principles, Supply Chain
December 4, 2015

Beverage Supply ChainIt’s no surprise that beverage distributors and wholesalers are now challenged by an array of revenue threatening issues – from ever-increasing stock keeping units (SKUs) and insufficiefnt storage capabilities, to improper slotting and a lack of picking effectiveness. The good news is there are strategies you can employ to turn challenges into wins, even in one of the toughest beverage distribution environments.

This was the subject of Beverage World magazine’s State of the 2015 Beverage Supply Chain webinar. The publication unveiled notable findings from its annual survey of hundreds of beverage producers, bottlers, distributors and wholesalers. The results revealed:

  • Nearly two-thirds of beverage operators across the supply chain said they were “extremely” or “very” challenged by the growth of SKUs.
  • The number of retailers serviced has increased across the supply chain within the last two years, as have the number of delivery routes and deliveries per week.
  • Technology based solutions are being implemented across the supply chain to help manage the complexity.

Because these trends show every sign of becoming even more prevalent with time, it’s crucial that beverage distributors employ strategies to address them now. This will allow you to exceed current challenges and prepare yourself for the increased business growth and profits you can experience by using the right tools for supply chain management.

At Ryder, we’ve found success for our customers by using five key strategies:

LEAN Processes – With roots in the Kaizen method of continuous improvement, LEAN techniques integrated into your supply chain will deliver long-term value and outstanding business performance, quarter after quarter and year after year. LEAN practices improve quality and productivity in your process by taking cost and waste out of all facets of your operation. With LEAN, every step in every process must add value for you. If it doesn’t add value, you strive to eliminate it.

Total Cost of Ownership (TCO) – When it comes to your fleet, do you know how much it costs to own and run it? Are you attributing the costs of your trucks correctly? Calculating the TCO of your fleet can be a daunting task. There are obvious costs – purchase price, cost of tires, fuel spend and maintenance. Then, there are costs many don’t think of that can skew your bottom line. Take a look at the info graphic below and make certain that you are considering all of the elements included.

Asset Utilization – The asset utilization ratio calculates the total revenue earned for every dollar of assets a company owns. Have you checked yours?

Automation – Automating your warehousing and distribution processes is undoubtedly the way to cope with all of the challenges to your supply chain now and in the future. Consider exploring the options to do this if you haven’t already.

Technology – Make sure that you have harnessed the power of the right technology to provide the real-time transparency you need to keep products flowing through your supply chain. With the right technology, you can make critical adjustments the minute they are required – and sometimes even before.

For more than 80 years, Ryder has implemented essential tools to provide source-to-shelf supply chain solutions to the world’s leading food and beverage companies to drive performance. I’ve seen how they succeed in driving performance for beverage distributors and wholesalers in particular – even in the most challenging market conditions. Take a moment and evaluate whether you are doing all you can to meet the challenges in your market. Then take the action you need to make sure you can do this well into the future.

 

Authored by Paul Lomas

Mr. Lomas is Vice President, Business Development for the Consumer Packaged Goods Group within Ryder Supply Chain Solutions.  Prior to Ryder, he led the supply chain practice for Accenture in New York City, was a Vice President with Cleveland Consulting Associates, and held materials management responsibilities for General Motors. 

 

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