Problem: Bringing order to a chaotic inventory replenishment system
U.K. coffee retailer Costa Express's growth plans were threatened by an inability to consistently forecast its partners' inventory replenishment needs. Software from ToolsGroup ended the guesswork and gave Costa clear visibility into its supply-demand world.
The Problem: Successful coffee retailing in space-constrained Britain requires creative resource utilization; the Starbucks "coffeehouse-on-every-corner" model is impractical. Costa Express, a unit of the Whitbread Group retail chain, has prospered by partnering with retailers to sell gourmet coffee from self-serve machines at airports, railway stations, hospitals, universities, offices, and gas stations.
Like many caffeinated growth companies, however, Costa faced the challenge of aligning its supply chain with a surge in business and the limits of its IT network. Since its 2011 acquisition by Whitbread, Costa had increased its machines footprint to 3,000 from 900. It also planned to expand beyond the U.K. But struggles with product replenishment threatened to derail its efforts. Though Costa's machines came with programs that supplied real-time sales data, its spreadsheet-based platform made it impossible to extract, consolidate, and present the data in a timely manner. Its replenishment-planning team was often left with the difficult task of estimating how much supply each site would need. They weren't always successful. As a result, many partners were overstocked, and inventory was lost to waste and spoilage that Costa couldn't reconcile. Costa realized the problem would only get worse as it continued to grow and the number of replenishment combinations multiplied.
The Players
Customer
Costa Express, a unit of the Whitbread Group retail chain Primary business: Selling gourmet coffee from self-serve machines at airports, railway stations, hospitals, universities, offices, and gas stations
Supplier
ToolsGroup
Solution
The Service Optimizer 99+ (SO99+) cloud-based supply chain planning solution
The Solution: In early 2013, Costa purchased a cloud-based software application, called SO99+, designed by ToolsGroup, a Boston-based IT solutions provider. The system took the guesswork out of replenishment. The system automatically collected data every four minutes from all 3,000 machines to spot sales and order trends and to forecast demand. It calculated the variances in demand and how much buffer stock would be needed at each site. It then created schedules for resupplying the precise amount of inventory at each site.
Costa could now match actual sales data with the levels of stock on hand at each site. By improving the accuracy of its forecasts, Costa enhanced a customer's coffee-buying experience and did it with less inventory. The company's replenishment team, freed from micromanaging supply, could focus on helping partners increase sales, improve service quality, and troubleshoot non-inventory-related problems. The software's accuracy and user-friendliness gave Costa the confidence to enter into direct sales and service relationships with ingredients suppliers instead of going through its existing third-party logistics service provider (3PL). This improved Costa's negotiating outcomes and made it easier to communicate changes to its vendors as its business grew. Along with the new replenishment software, Costa brought in a new 3PL and significantly flattened its distribution network. The company went from having one central warehouse and nine regional locations to just one facility.
The technological and physical changes, combined with the ability to purchase supplies directly, paid huge dividends for Costa. After six months, its logistics costs had dropped by 30 percent. Its carbon footprint was cut by 70 metric tons. There was a 20-percent reduction in field stock held at partner sites, and delivery refusal incidents from partners were halved. Costa developed direct purchasing relationships with 15 suppliers covering more than 50 stock-keeping units (SKUs) and renegotiated changes in product prices and pack sizes that led to a cut in the cost of some items.
As for expansion, Costa in January launched an "intelligent coffee station concession" to be placed in high-end properties, starting with locations in Dubai. ToolsGroup software will link up to these machines in the same way it does with Costa's standard equipment. Costa also plans to use the software to manage its spare parts supply chain.
By the way, the new concession is equipped with a feature that releases coffee smells to create what is being labeled an "immersive coffeehouse experience." If Starbucks' color weren't already green, it might be turning green with envy.
Terms of the deal were not disclosed, but Aptean said the move will add new capabilities to its warehouse management and supply chain management offerings for manufacturers, wholesalers, distributors, retailers, and 3PLs. Aptean currently provides enterprise resource planning (ERP), transportation management systems (TMS), and product lifecycle management (PLM) platforms.
Founded in 1980 and headquartered in Durham, U.K., Indigo Software provides software designed for mid-market organizations, giving users real-time visibility and management from the initial receipt of stock all the way through to final dispatch of the finished product. That enables organizations to optimize an array of warehouse operations including receiving, storage, picking, packing, and shipping, the firm says.
Specific sectors served by Indigo Software include the food and beverage, fashion and apparel, fast moving consumer goods, automotive, manufacturing, 3PL, chemicals, and wholesale / distribution verticals.
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“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."
According to New Orleans-based LongueVue, the “strategic rebranding” brings together the complementary capabilities of these three companies to form a vertically integrated flexible packaging leader with expertise in blown film production, flexographic printing, adhesive laminations, and converting.
“This unified platform enables us to provide our customers with greater flexibility and innovation across all aspects of packaging," Joe Piccione, CEO of Innotex, said in a release. "As we continue to evolve and adapt to the changing needs of the industry, we look forward to delivering exceptional solutions and service."