January 2011 | Commentary | Checking In

Gaining Ground

Tags: Inventory Management, Supply Chain Management

Keith Biondo is the publisher of Inbound Logistics magazine.

The fortunes of many companies were balanced on the backs of their supply chain, logistics, and transportation managers during the past year. In concert with their carriers, and technology and logistics partners, business logistics professionals across the country produced real supply chain gain by aligning demand to supply. That’s why we chose “Supply Chain Gain” as the theme of this year’s Logistics Planner issue.

Supply chain gain is not just about squeezing costs or boosting efficiencies. Consider Del Monte Foods, which recently accelerated its demand-driven logistics program using real-time store-level demand signals to cut inventory rates by 27 percent in two years (in one demand-driven pilot program, DC days of supply were slashed by an astounding 44 percent). The company also reduced safety stock; both results freed up substantial working capital. Inconsistent fill rates became more reliable, and today stand at 99 percent, with better than 98 percent in-store stock at key customer locations. Major retail customers also liked the fact that their DC pallet space requirements were reduced by 65 percent in some cases. But perhaps the most important supply chain gain was increased sales.

Coca-Cola Bottling Company achieved significant gains this year, too. Determining that supply chain decisions were disconnected and removed from the store shelf, the company’s logistics team accelerated demand-driven efforts. Coca-Cola Bottling delivers more than 160 million cases each year, so the stakes are high and the tasks complex. Like Del Monte, it gained efficiencies, and sales-to-inventory turns increased by 75 percent. Connecting the supply chain more closely to the shelf enabled Coca-Cola Bottling to craft a logistics platform from which to launch almost 150 new products.

National Starch achieved supply chain gain by tightening its focus on managing inventory. In little more than one year, the inventory management team reduced working capital needed to sustain sales by cutting total inventory by four percent. The company also cut expedited transport costs and increased inventory turns. And, like Coca-Cola and Del Monte, the supply chain gains drove increases outside logistics— in plant utilization, improving customer service, and supporting marketing efforts.

These supply chain gain sagas, and the others you will read about in this issue, are inspiring reminders of the important work you do every day, in good times and in bad. We want to hear your story, too, because we know that, large or small, every incremental gain interacts with others to move the enterprise in the right direction.

So drop me a line at and share details on the gains you’ve made that have helped offset the impact of our current economic environment.