Managerial implications
There are a number of managerial Implications that can be drawn from the case study and which would apply to any application of FGP. The first is the need for a degree of scale in the inbound distribution network. A number of the benefits within the case study are obtained because of the scale of the retailer. Smaller businesses may not be able to obtain these on their own. Also, the geographic distribution of suppliers is important in order to enable the back loading of vehicles.
There is also the need to ensure appropriate management processes are in place within the customer's organisation. Because of its focus on inbound distribution, there are different demands on logistics managers when compared to outbound deliveries. These protocols need to be compatible with all current processes to ensure a smooth transition. Further, these should be supported by appropriate performance measures to ensure that the intended benefits from implementation are delivered.
There are also relationship issues that arise. In implementation FGP, the customer must ensure good dialogue with both the supplier and transport provider. The benefits for both parties must be specified. While this is less of an issue in the grocery sector due to the relative power of the retailers, in other sectors it becomes more important.
Finally, the move to FGP is likely to be a gradual process. Therefore, during the transition period, it is important that any priorities for FGP deliveries over non-FGP deliveries are identified and communicated to relevant personnel. This is particularly relevant where extensive use is being made of third party logistics providers. Because the vehicles will bear the branding of the transport company, distinguishing between FGP and non-FGP deliveries can be made on the basis of supplier only.