FaisalHitesh YadavKreeti MahajanPavan KumarVarun Deep SajjaVenkata Ramanan

SUPPLY CHAIN MANAGEMENT @ SYSCO

Basic Model: Procurement through different vendors and redistribution of the items, SYSCO never got involved in the manufacturing of the products

ROBUST AND WELL CONNECTED DISTRIBUTION NETWORK

15000 separate items including medical and surgical productsA dedicated logistics department, in association with the procurement

department, organized inspection, purchase, and delivery of the company’s three basic grades of products from manufacturers, individual vendors and producers

A fleet of 4100 trucks for the delivery of foods from 3000 suppliers to approximately 3,90,000 customers comprising of institutions such as hotels, restaurants, convenience stores, healthcare and educational facilities

Internal growth strategy- Fold Out Strategy This involved establishing new distribution centers in established markets The fold out market was established near to the market when compared to

the its existing distribution centers

National Supply Chain Project

SYSCO established a network of regional distribution channels (RDCs) also known as regional corporative

Objective: Optimize the supply chain initiatives by focusing on reduction of inventory,

operating cost, working capital requirements and future facility expansion Supplier consolidation facility by bringing products of over 100 suppliers under

one roofResults:

Shipping accuracy of 99.941 percent Increased coordination among the subsidiaries as orders received by different

subsidiaries would go directly to the RDC, where the demand would be aggregated for more efficient distribution. RDC also held the safety stock for the subsidiaries in a centralized manner

Increased efficiency of SYSCO’s supply chain management system tremendously Increased reliability of the entire system as was able to deliver products to the

entire customer base even when one of its RDCs was affected in the Katrina Cyclone

Limitation: RDCs required considerable financial investment therefore the number was restricted to 7-9 and were introduced in the phased manner

National Supply Chain Project- Products Categorization

All the Products of SYSCO

Type D

Type B & C

Type A

Fast moving products- would be received by the subsidiaries

directly from the supplying companiesWere carried by the

Regional Distribution Centers

Formed 10 percent of the total products - Handled by forward

warehouse network

Robust Supply Chain Initiatives helped the company the following four objectives:1. Lowest net landed cost in the industry2. Food security and Safety3. Operational Flexibility4. Capacity and Predictability

The ChefEx Program

SYSCO established a network of regional distribution channels (RDCs) also known as regional corporative

Objective: Deliver to their customers a wide range of high quality products & ingredients by

connecting suppliers and customersResults:

Simplified the delivery of specialty products which was a great problem because of its low volumes, smaller orders and low shelf life

More than 100 suppliers offer more than 700 products Enabled restaurants to offer more choices in their menu without stocking

inventory of costly raw materials

RESULT of SCM Initiatives

ChefEx Program

• Distribution of specialty food products - low volumes, smaller orders, low shelf life• Resulted in distribution to only limited regions and customers

Problem Situation

• Connecting suppliers and customers for efficient delivery of a wide range of the highest quality gourmet poducts and ingredients

Proposition

• Initial quality testing of supplier’s products for accredition• Products made available to customers through marketing associates and website• Orders taken and forwarded to appropriate suppliers• Supplier invoices and finalises pricing and delivery with customers, followed by confirmation order by

Operating Company through ChefEx program• Suppliers delivered products to customers directly

Supply Chain Mechanism

• Overcame regional and customer limitations in the supply chain• 100+ suppliers offering over 700 products enrolled• Enabled restaurants to expand choices, while reducing stocking of inventory• Customers spoilt for choice in gourmet food, without inconvenience

Result

Vendor Management

Vendor Management

Success

Intense understanding

of suppliers’ and SYSCO’s businesses

Collaborative model

contributing to mutual

profitability

Maintaining close relation with suppliers

Awards as incentives for

suppliers

IT in Supply Chain

• Infosys partnership to improve cost and supply chain efficiency• Regional distribution centres (RDBCs) created to save transportation and inventory costs; savings worth

$ 27 million; extensive integration with existing SYSCO software platforms• CriticalArc Tech partnership to connect internet order system with web based supply chain management

application• Implementation of automated order selection system reduced errors and operating costs• Electronically connected to suppliers using EFS technologies for seamless information exchange• SYSCO Uniform System implemented to automate filing and indexing invoices, helped in streamlining

supply chain invoices• Bar coding, RFID and sensor based system implemented; increased accuracy, efficiency levels and better

storage standards of foods• Measurement of subsidiaries’ metrics in various parameters for a best practices portal reflecting

scorecard for each of them

InfoTech Initiatives

Suppliers

• Fewer destinations and payments• Consolidated orders , forecasts• Economies of scale in shipments• Accurate demand for scheduling

SYSCO

• Lower safety stock• Cost efficient transportation• Less product handling• Increased sales growth

Customers

• Improved service levels• Wider product selection• Shorter lead times• Reduction in incremental cost

Benefits of RDBC Integration

Benefits from Redistribution Centers to SYSCO’S Supply Chain

Thank You !!