Operational benefits of FGP
There are a num bed of operational benefits that arise for the retailer from implementing FGP. One of the most important of these is the increased supply chain visibility provided to the retailer. As discussed previously, this enables the inbound distribution network to be managed more effectively so as to reduce transport costs. Further, the retailer has greater insight into the behaviour of its replenishment processes in response to changes in demand. Therefore, excessive amplification of customer demand can be identified, and the root causes of this addressed.
In terms of the transport benefits obtainable, those in relation to less than truckload suppliers were quantified during the mini-project with the case study retailer. In the context of the retailer's business, these deliveries account for 18 per cent of the total ambient volume, 57 per cent of composite volume and 35 per cent of total grocery volume. As noted in the method earlier, data from the retailer was modeled in a network planning software package to determine the transport distance and cost benefits. The results for both ambient and composite networks are detailed in Table 2