An initiative to share key sales and forecasting data with
suppliers has dramatically boosted efficiency in Iceland's supply
chain, the frozen food retailer has revealed.
The company, which operates 760 stores across the UK and Ireland,
began a project last June, allowing key suppliers such as Coca-Cola
and Sun Valley Foods to tap into relevant replenishment and
forecasting data stored in its JDA retail systems.
Sharing information with suppliers via JDA's web portal,
Marketplace.com, has dramatically increased the effectiveness of
events and promotions, reduced distribution costs and cut warehouse
stock, said James Hulse, supplier development manager at Iceland.
"Since the private label manufacturing process is typically geared
towards unique specifications, matching supply with demand is
especially crucial," he said.
"We are now giving our suppliers access to the store as well as
warehouse data required to help them to manage their business with
us far more effectively."
The system adds an additional layer of security so that all
collaborative applications reside behind Iceland's firewall. It
also incorporates software that allows selected reports to be
distributed to defined users by e-mail.
Before the initiative was launched, a supplier to Iceland was
working with limited information in an uncertain environment,
resulting in markdowns or inefficient use of transport, Hulse
said.
Few suppliers had visibility beyond their dispatches or knowledge
of the Iceland business. When information was shared, suppliers
could not react quickly enough to changes in stock requirements and
increased consumer demand.
"Getting forecasts wrong can and does lead to significant cases of
overstock," Hulse said.
"By allowing our suppliers to get more involved in the entire
supply chain we knew we could benefit from fewer stock-outs,
improved availability, more successful promotions and, ultimately,
better customer service."
Since the introduction of the initiative Sun Valley Foods has seen
significantly lower distribution costs and increased vehicle
utilisation.
This year, it has achieved the lowest average pallet rate ever with
Iceland, said Ian Parkes, supply chain planning manager at Sun
Valley.
"We try to deliver into Iceland less frequently, with fuller loads,
so we have reduced delivery costs significantly, partly by sharing
loads with another supplier," he said.