A Canadian importer of frozen fruits and vegetables realized its costs were too high and its margins were too low. As a solution, the company needed to assess and develop programs for its supply chain.
A Canadian importer who specializes in providing customers with premium quality frozen fruits and vegetables expanded into markets in the U.S. and Australia. Its supply network includes more than 60 agri-food producers in 20 countries and its demand network includes food distributors and retail grocery chains throughout North America. The company markets its products under its own label and private label brands.
The company recognized its supply chain costs were high and its margins were too low. By assessing its supply chain, the company could pursue four major initiatives:
- Remove bundle for inbound freight costs (included in the suppliers’ product cost)
- Improve demand planning, forecasting, and procurement processes
- Establish relevant and actionable key performance indicators (KPIs)
- Develop a supplier performance improvement program
Tompkins International's Role
- Conducted an inbound freight bid and conversion to company-managed freight agreements.
- Designed complete demand planning solution; managed software selection process, implementation, and training programs.
- Identified KPIs and provided technical supervision for creating a report to be used by internal organizations.
- Created supplier relationship management program that emphasizes product and packaging specifications, and defines transportation responsibilities and quality metrics.
- Improved in-stock inventory status due to more accurate demand planning and inbound logistics performance. Overall inbound freight costs were reduced by more than 12%.
- Dead and slow moving inventory became easily identifiable and remedial action plans became easier to implement.
- Overall inbound logistics costs were expected to drop while on-time transit times became more consistent.
- Overall inventory carrying cost was expected to be reduced by more than 18%.
- Developed 13 organizational KPIs and provided technical supervision of the report creation