Industry News | July 8, 2013

Technomic Study Reveals Untapped Cost Savings

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A recent Technomic study incorporating R3 Reliable Redistribution Resource business insights revealed that the foodservice broadline distribution segment could save at least $600 million in upstream supply chain costs by effectively using redistribution logistics. Inbound freight savings was one of several findings in the study that quantifies redistribution’s positive economic impact on the foodservice industry.

 

R3, a leading North American redistributor of disposable operating products and related services to distributors in foodservice and other industries, contributed its insights and a case study to the Technomic Foodservice Planning Program study, “Best Practices in Supply Chain and Redistribution.” Technomic interviewed industry supply chain professionals, reviewed numerous “Cost to Serve” studies, and performed extensive analysis on redistribution in the foodservice value stream.

 

“Redistribution has been around since before foodservice even knew it had a supply chain,” says Barry Friends, Technomic consulting principal. “Yet, in the absence of activity-based costing, many fail to understand its potential to reduce total ‘Cost to Serve’.”

 

Technomic executive vice president Gary Karp cited R3’s category management relationship with a super-regional foodservice distributor as a “reduced inventory” best practice, further noting that the positive impact on the distributor’s sales, asset utilization, and profitability led to a successful company-wide expansion.

 

“R3 values the factual information and analysis that this study provides for the foodservice industry,” says Earl Engleman R3 president. “We are pleased that Technomic chose to include our case study to show how collaborative category management can benefit redistribution customers. This and other important collaborative work, such as optimizing space and logistics processes, will reduce a distributor’s total ‘Cost to Serve’. By using this best-practice model, we help drive increased profits and greater customer satisfaction throughout the supply chain.”