Defining the flows of fresh food trays at a Belgian retailer

Abstract

This paper explains the findings of our two month research at Colruyt Laagste Prijzen, known for its promise to provide customers with the lowest product prices in their stores. In order to guarantee this promise, Colruyt Laagste Prijzen needs to define, manage and minimize every financial outflow within their operations. Colruyt Laagste Prijzen uses reusable trays to simplify the distribution process to its stores. These so called EPS trays rotate in a closed pool system, managed by European Pool System. Over the last three years, Colruyt Laagste Prijzen noticed an increasing mismatch between the operational and financial flows of EPS trays within its supply chain and therefore opted for a comprehensive analysis on all the operational and financial flows within the Colruyt Group. Colruyt Laagste Prijzen manages the internal EPS depot for European Pool System in a Third Party Logistic Model. Given this relation, the complexity of 3PL relations needs to be taken into account for our recommendations. The mismatch between the operational and financial flows has been overlooked the last years. First of all, it is not Colruyt Laagste Prijzen primary business to wash and divide EPS trays. But also the complexity of all different operational flows and its different registrations made it a tough nut to crack. However, the increasing mismatch and the drive to excel in its supply chain urged them to master this process again. We took advantage of this unique opportunity to take a deep-dive in the exciting business of EPS trays at Colruyt Laagste Prijzen and to make everyone familiar with what exactly is going on and to provide them with our fresh and external view. In order to achieve in our consultancy project, five objectives were put forward: 1. Understand stakeholders and document current CLP processes around all EPS trays related processes. 2. Define the different registration points among the operational flows. 3. Quantify the magnitude of the different operational flows. 4. Disclose attention points among the processes. 5. Provide recommendations by linking attention points with the mapped operational flows. To tackle the first objective, we acquired a great deal of information from relevant stakeholders within the organization through multiple interviews and work meetings with all involved stakeholders. Moreover, we gained some first-hand insights through internships in relevant departments. To illustrate these processes in a clear way, process flow charts in a chess pattern were used to create swimming lane diagrams. The second objective required a comprehensive analysis on the different registration points among the operational flows. We applied the same successful methodology as for the first objective and conducted many interviews and some work meetings to grasp an idea of the many registration points in different systems. Also, we checked out ourselves on these registration points through internships in the DC and RC. These registration points were integrated in the process flow charts in order to provide the company with a complete picture. The third objective required a quantitative analysis of the different operational flows among the Colruyt Group. We gathered relevant information in different data systems from different stakeholders to create a high level view on EPS trays in the Colruyt Group. The fourth objective allowed us to benefit from the expertise gained during the previous objectives through internships, interviews, work meetings and the quantitative analysis. This resulted in many interesting attention points which might cause the mismatch in the operational and financial flows. The fifth objective is the cherry on the cake of our comprehensive analysis. Here, we provide interesting recommendations on the raised attention points. We are convinced that the provided recommendations, once implemented, would contribute to a better match in the operational and financial flow of EPS trays. Providing recommendations is one thing, implementation of these recommendations is another thing, definitely in a project that recently started and is continued for the next 10 months. Therefore, we will explain the different next steps to be taken for the success of the project. First of all it is key to create a full understanding of the financial flows as well, by linking them to the operational flows and registration points we analyzed. Afterwards, time is needed to implement a sustainable solution. The next months will definitely be very interesting!