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End-to-end supply chain

2012

When it comes to delivering the right product in the right quantity and quality, at the right time and at an attractive price for consumers, retailers and manufacturers alike face an enormous challenge. They can only succeed by working closely together.

Roland Berger Strategy Consultants, in close cooperation with leading German retailers and selected manufacturers of consumer goods, has developed an innovative approach that considers both the market perspective and logistics costs. In it, we systematically examine logistics costs along the entire value chain – process costs, the cost of stock-outs and write-downs, the cost of tying up capital in inventory.

We then quantify the relevant drivers and optimize them, using this as a basis to derive new strategies for delivery routes. The result is a tool for successful E2E optimization of retail logistics. It gives quick answers to the critical logistics questions facing every retailer:

  • What is the total cost of my supply chain?
  • What delivery route is best for each supplier?
  • How much warehouse space do I need?
  • How much potential lies in having less write-downs, fewer stock-outs and less inventory?

The E2E approach describes the relationships between internal store processes and supply processes, quantifies them and makes them a basis for further decisions. For the sake of clarity, we divide the functions into three sub-models: warehouse/ distribution costs, store KPIs, and store processes. We can use the overall model to calculate the exact costs for each supplier, store and product group, right down to the level of individual articles in a consignment.

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