Organising distribution operations across complex networks – as is common when delivering into large supermarket chains – is no small feat, and it’s easy to go wrong. RF Supply Chain Expertise CEO Reto Fuhrer explains what’s involved – and how to get them right.
Complex distribution operations involve many moving parts, so it’s imperative for companies to implement an effective plan for an integrated logistics network well in advance if they are to avoid potential pitfalls.
This is particularly so in the food and beverage sector and similar industries, where fulfilling wide networks – such as major supermarket chains – involve very low margins. If something goes wrong, not only might you compromise your reputation, but it will cost you dearly.
Before I was CEO of RF Supply Chain Expertise, I implemented many complex distribution programs, and have the expertise to help Aussie companies get them right.
Let me illustrate some of the challenges accompanying such implementations by way of an example from earlier in my career.
When I worked as the Director of Supply Chain Management for HACO AG, a subsidiary of the global food manufacturing company HACO Group, the company won a tender to deliver soups and other dry mixed products into Lidl supermarkets and warehouses throughout various countries in the European Union (EU).
As we were based in Switzerland – outside the EU – we had to tackle challenges concerning customs and value-added tax (VAT) differences as goods moved across the EU border.
After getting HACO products into the EU, we then had to distribute them to many national and regional distribution centres (37 in Germany alone, for example). In certain instances, products were delivered into cross-docking warehouses with tight delivery windows where – for instance – if we missed a two-hour timeslot, we not only would have risked not executing on our delivery contract and incurring fines, but would also have had to organise and foot the bill for last-minute alternative deliveries to ensure we got the product where it needed to go on time. If you get the timing wrong, it’ll cost you.
As we were delivering HACO products into a Lidl network across numerous countries – Lidl operates in 24 countries within the EU – securing the right logistics partners was essential. There was no one size fits all model. Identifying trusted and effective regional logistics partners who can execute to meet local conditions was vital. Not only must partners have the requisite expertise, but they must also have aligned values and work ethics – and the processes in place such that they can be trusted to deliver on their assigned responsibilities.
When organising distribution from warehouses to supermarkets, I also had to ensure that proper assortment capabilities were in place: correct barcoding, labelling, and even building correct-specification supermarket trays so products could be delivered seamlessly onto shop floors at Lidl supermarkets in different countries.
From import/export customs challenges, through transportation, timing, and shop-floor considerations – across scores of warehouses and supermarkets – the same factors I coordinated for HACO are present in the Australian food and beverage market, as well as comparable industries like FMCG.
For companies delivering into vast, multi-faceted, and regionally specific markets – particularly if they’ve never done it before – what I’ve described only touches the surface.
If your company is considering prepping a complex logistics operation, touch base with RF Supply Chain Expertise. We have the depth and breadth of experience – built through decades of high-level projects across many continents and sub-markets – to plan and execute such operations in high-stakes markets where there’s no margin for error.
To connect with CEO Reto Fuhrer on LinkedIn, click here.