ECR AP - GS1 Hong Kong Supply Chain Management

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ECR AP Award Bronze
Integration of Logistics Distribution Drives Supply Chain
Optimization - Collaboration among producer, retailer, and 3PL to drive change in FMCG & retail industry
By Metro China, P&G China, Unilever China
Denny Yang Head of Supply Chain and Logistics METRO China Alfons Van-Woerkom Customer Service Director Unilever
In China, most big producers already have their distribution network,
while recently many retail giants have started to build up
their own distribution network.
Is there any chance to integrate the distribution networks and
build up the supply chain excellence for both parties
Metro China raised a challenge: Can big producers’ existing
distribution be integrated into retailer’s distribution network and
change
the existing
model
as below
With logistics
integration
we
could
have continuous
Supply Chain Performance Improvement like:
Leaned supply chain & better chance for profitability for
both parties: no need for distributor
Simplified and efficient ordering, order processing, invoicing,
payment & administration
Efficient goods receiving at DC & store
Backhaul sharing & pallet delivery
Master Data and GDSN
For This initiative Metro reached out several suppliers including
big, medium and small sizes.
Lin Hu METRO Customer team Director Procter & Gamble
P&G is the pioneer and the first leading supplier to work on
changing the distributions center system in China with Metro.
Metro has 54 stores across 39 cities. This is already a mass distribution.
But in 2-3 year Metro will open 100 stores in multiply
cities . Can you imagine what type of mass supply chain would
be needed
That brings DC integration idea comes necessary.
For P&G this is a
learning journey
rather than a project.
In the last 3
years we have
been working together
as a team.
As a result of these
3 year: we improved
our supply
chain KPI’s These
KPI will become a joint scorecard of the 2 companies.
What collaboration delivers It delivers sustainability. This is
one of the key driver why Unilever want to collaborate.
One of the
component
we consider
in Sustainability
is logistics
In China
we had a
complex
situation
what we
had to change:
As a result:
Increase of on-time delivery , order fulfillment,
decreased quantities of order and invoice
Better chance and flexibility (e.g. to consolidate goods via
multiple DCs) to serve business of urgent orders, promotion,
peak season and etc.
Enable further supply chain optimization (e.g. palletized
delivery, selective check, speed-up store goods receiving
OSA etc.)
Simplified and efficient OTC processing
Shorter stock days
Order scale increase helps to gain more discount from manufacturer.
Metro has successfully implemented this approach with smaller
suppliers also like Vinda, UPM and Supor.
Summary:
Building skills and capabilities: Skills might not be there
yet. Unilever and Metro HR teams meet together to understand
how we can develop people in their supply chain career.
Supply chain is learning journey
Supply chain is not only logistic work but a multifunctional
effort
Being partner we want to delight our end customer
Strong support from supplier Metro is driving the change in
China. We can create more value and change the life of
customers.
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