Case Study: Improving the Profitability of a Supermarket Chain
Source: Better Management.com
One of the UK's supermarket chains had two Regional Distribution Centres serving 200 branches. The business wanted more refined distribution costs, a model of 'selling' (ie a typical branch), the net profit at category level in the branch, the ability to simulate different distribution and selling configurations, and a better negotiation base for 3rd party distribution. To provide the answers, an Activity Based Management (ABM) project was set up. The result, after three months, was the identification of an opportunity to increase the current overall net margin by 17% - many £Ms.