Tailored Logistics Solution for UAE Grocery Retailer Sourcing from India | Case Study
Summary
A leading UAE-based grocery retailer sought to transition from wholesale distribution to self-distribution to reduce inventory costs, improve supply chain visibility, and enhance service levels. However, the company faced challenges due to a lack of infrastructure, technology, and demand planning expertise. Al Sharqi provided a tailored self-distribution solution, including building a dedicated distribution center, implementing demand management services, and optimizing replenishment planning, leading to lower costs and improved service reliability for their operations sourcing from India.
Customer Challenge
The grocery retailer faced several challenges while transitioning to self-distribution from India:
- Lack of Supply Chain Control: Relying on wholesalers for inventory resulted in limited visibility and poor control over stock levels and supply chain efficiency.
- Excess Inventory & High Costs: Without optimized demand planning, the retailer carried excess stock, leading to higher storage and logistics costs.
- Service Level Issues: Inefficient replenishment planning caused stockouts and delayed deliveries, leading to customer dissatisfaction.
- Transition Complexity: Shifting to self-distribution required new infrastructure investment , technology, and demand planning expertise that the retailer did not have internally.
Our Solution
Al Sharqi designed and executed a comprehensive self-distribution strategy tailored to the retailer’s needs:
Establishing a Dedicated Distribution Center
- Provided a state-of-the-art multi-user distribution center in Dubai to ensure efficient inventory storage and management.
- Implemented warehouse automation with RFID scanning and real-time inventory tracking for enhanced stock visibility.
Demand Management & Replenishment Planning
- Deployed demand forecasting, incorporating historical data, market trends, and seasonality for better replenishment accuracy.
- Optimized safety stock levels to balance product availability while reducing excess inventory.
- Introduced daily replenishment to their secondary distribution center/ Stores, reducing stockouts and ensuring timely product availability.
Supply Chain Optimization & Vendor Collaboration
- Integrated suppliers into a centralized WMS system, allowing seamless order management.
- Established a responsive last-mile delivery network, ensuring timely delivery of grocery products to stores.
- Developed a structured transition plan, enabling the retailer to gradually phase out wholesaler dependency.
Customer’s Benefits
The retailer experienced significant improvements in its operations:
- 40% Reduction in Inventory Holding Costs: Improved demand forecasting reduced the need for excess stock.
- 35% Faster Replenishment Cycles: Enhanced order accuracy and warehouse efficiency streamlined replenishment.
- 95% Service Level Attainment: Reduced stockouts and ensured consistent product availability for customers.
- 25% Lower Logistics Costs: Optimized inventory flow led to substantial savings in warehousing and distribution.
- Scalable Model for Expansion: Enabled the retailer to expand its store network without incurring additional logistics costs.
Conclusion
By partnering with Al Sharqi Logistics, the UAE-based grocery retailer successfully transitioned to a self-distribution model, reducing costs and improving service reliability. Our expertise in warehouse management, demand planning, and last-mile delivery optimization provided a scalable solution, positioning the retailer for sustainable growth in the competitive UAE grocery market.
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