Case Study: Consolidating Distribution to Improve Reliability and Reduce Cost
Client Snapshot
A national prepared-foods retailer with hundreds of store locations relied on two separate distribution networks to supply its products. Core protein products were delivered via supplier-managed trucks that also serviced large grocery clients, while all other items, including sandwich ingredients, side dishes, and packaging supplies, were delivered by regional foodservice distributors under separate contracts.
The Challenge
The supplier-managed delivery network for protein products operated at very low cost because deliveries were added onto existing grocery store routes. However, this system prioritized grocery distribution centers and retail chains over the retailer's own stores. As a result, deliveries to retail locations were often late or arrived at unpredictable times, creating staffing and inventory challenges.
The company tolerated the poor reliability due to the cost advantage and remained reluctant to explore alternatives, believing that any change would introduce additional expense without clear benefit.
The Approach
An analysis was conducted to evaluate the total cost and service impact of the dual-distribution model. Store-level delivery data was gathered across the network, and a simulation was developed to compare historical volumes and costs under both the current structure and a proposed consolidated model.
The proposed model shifted protein deliveries to the same regional food distributors already delivering other products to stores. By using volume-weighted route planning, the simulation projected improved delivery reliability and a reduction in overall cost, despite higher unit costs for the core product.
The model demonstrated that the consolidated approach would generate over $1 million in annual savings while also improving delivery consistency. The results provided store-by-store visibility into volumes, delivery frequencies, and distribution center alignment, which allowed leadership to clearly understand the tradeoffs.
The Outcome
The company moved forward with the consolidated model and transitioned all product deliveries to the existing foodservice distribution network. In the first year, actual savings exceeded projections, totaling $1.25 million. Delivery reliability improved significantly, reducing operational friction at the store level.
As the company grew, the streamlined distribution approach scaled efficiently and provided better service, fewer disruptions, and tighter control over delivery timing. What began as a reluctant experiment became an ongoing standard practice.
Lesson Learned
Reliable decisions come from well-structured data. The success of this initiative was not due to proprietary tools or privileged insight, but to the ability to break down existing data in a clear and meaningful way. When data is mapped and presented in a digestible format, it becomes a story people can trust and act on.