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Farmfoods - Customer Case Study

Supporting a Grocery Retailer’s Distribution Network Strategy 

Farmfoods - Customer Case Study

Farmfoods the frozen food specialists has expanded throughout the United Kingdom to 320 stores selling frozen, chilled and ambient products.

The stores are serviced by three Distribution Centres (DCs) in Cumbernauld, Warrington and Birmingham which service approximately a third of the stores each.

Farmfoods engaged the specialist logistics team at Gideon Hillman Consulting, to review the Birmingham DC operations and capacity constraints and the complete UK ‘own fleet’ multi-temperature distribution operations. The review was to assess the capacity of the existing logistics network.

"Farmfoods Management wanted an unbiased external review of their logistics operations to ensure that they were optimising the existing logistics network capacity" Gideon Hillman – Managing Director "...through our warehouse and transport specialist team we provided Farmfoods with a detailed analysis of their current logistics network operations and recommendations for the future".

The Birmingham DC capacity review was carried out by the specialist warehouse consultants through working with the customer and observing every part of the physical handling, warehousing and picking operations from good received to order despatch. Recommendations were made for areas or process that could yield additional capacity.

The specialist transport consultants carried out the logistics network modelling and simulation using the industry standard Distribution Planning System (DiPS) routing and scheduling package.

"Gideon Hillman Consulting provided us with an excellent view of our current operations and they were able to make recommendations without any constraints or pre-determined outputs. This approach provided us with peace of mind that what we thought was right was subsequently validated by an expert third party" Gerry Savage – Retail Director Farm Foods "...I would not hesitate to engage the team at Gideon Hillman Consulting again in the future".

The first step was to create the ‘as-is’ or base case model for a representative average period to replicate the current multi-temperature regime pallet distribution operation within the DiPS software. This was built and refined until it matched what the actual resource requirement was for the period in terms of vehicle count and profile, vehicle fill, mileage, driver hours and all costs associated with the delivery (including labour, fuel and other vehicle costs).

From the base model a number of scenarios were modelled and compared against the base case and each other in terms of; vehicle fleet size and profile, aggregate mileage driven by vehicle type; drivers’ hours and other expenses such as overnight stays; Costs for each element and the change of distribution boundaries between DCs.

The different scenarios modelled included; a move to 24 hour deliveries; expanding the delivery window to any time during staffed hours; separate ambient and temperature controlled deliveries; and finally the option of a fourth depot added to the network.

Although there were some short term recommendations to alleviate capacity in the delivery network, the conclusion was that he fourth depot scenario was the most beneficial long term strategy. Through DC boundary alignment it would provide capacity relief to the Birmingham depot which in turn would then provide relief to the Warrington DC. This in turn provides capacity for growth in England and Wales. The fourth depot would serve the area that offers the greatest growth potential for Farmfoods.

Since completion of the project Farmfoods announced its plans to open a fourth DC which is a 175,000 square foot multi-temperature facility in Bristol.

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Gideon Hillman Consulting is a trading name of The Supply Chain Consulting Group Ltd is registered in England and Wales.
Company Registration No: 09751027. Registered office at Highdown House, 11 Highdown Road, Leamington Spa, CV31 1XT. UK
A supply chain and logistics specialist with knowledge of supply strategy implementation, logistics outsourcing and inventory policy development

CMI Awards Finalist 2010 SHD Logistics Awards UKWA Customer Service Award Finalist 2014 SHD Logistics Awards Finalist 2016 UKWA Winner 2016 SHD Logistics Awards Finalist 2015 ISO 9001 RegisteredLogistics Awards Finalist 2018Supply Chain Excellence Awards 2018