Nestle Case Study

Nestle Case Study

Nestle DSD Controls Costs Through Proper Warehouse Management

Using proper supply chain management and order processing,Nestle DSD is able to maintain accurate orders and delivery.

Nestle is one of the world’s leading nutrition,health, and wellness companies, saw anopportunity that it just couldn’t resist, but in the Kraft’s North American frozen pizza business.As Kraft divested itself of one of its only major frozenfood products, Nestle needed to have an adequate supplychain infrastructure to handle this type of product.This type of product had a limited shelf-life and requiredspecial delivery and handling to prevent spoilage.Nestle already had a ton of experience with frozenproducts like ice cream, and they looked to InsightGroup for help in this new product distribution. Nestle was working with Insight through its association withDreyer’s, who had been merged with Nestle ice creamproducts years earlier. Over a 4 year period, Insight had worked with Nestle to develop a program that began with theNational Warehouse Director rolling out the solution in cities like Seattle and Chicago first, and then company-wide. The system they had chosen. The DC Expert, integratedfully with the existing ERP system. This was essential to maintainaccurate orders and maintain proper deliveries.

Still Frozen, But A Completely Different Product

The acquisition of the pizza line presented a whole new set of challenges for Nestle. All of the systems neededto redesigned to accommodate the differences betweenshipping ice cream and pizza, especially since you are working in a direct to store delivery (DSD) environment.Coordination between stores, corporate, and thewarehouse must be seamless. There is just too much risk if you try to deliver too much, which won’t fit in thestore’s coolers, or if you deliver too little and the storeruns out, costing both companies sales.Nestle DSD and Insight worked together to alterplans on 14 different operations during the acquisition process, nearly 13 weeks. As the DC expert has beenrolled out into different markets across Nestle DSD's supply chain, the coordination and data becomes evenbetter. The integration of the system with the existingERP allows for a seamless order process while allowingfor forecasting and manual order changes.

Stock Levels Affect Everyone

Keeping every store adequately stocked at all times is thepriority, whether this means a once a week delivery, or 3 times a week. With this type of collaboration and order accuracy, shipping and storage costs are driven down.The more accurate the ordering solution becomes, the less waste and overstock that is destroyed. The out-of-stocklevel will also decrease significantly.No longer are warehouses sittling full of product waiting to go out.If product is coming in, product is going out. A free-flow of productfrom manufacture, to distribution,to DSD is essential. It keeps the factories working at the correct levels without creating overstock, or having to work overtime if enough product was not initially ordered and therefore produced.

DSD Can Be A Challenge,But Worth It

As more retailers are looking to companies to provideDSD services, it can be a challenge to the suppliers.Having the right DC management system in place canchange everything. In an age where margins are thin,being able to capitalize on accurate deliveries and supplychain management can be the difference between successand failure. Nestle DSD has taken all of the steps to make sure that as the DSD business grows, Nestle DSD is right there with it.