Sysco 2007 Annual Report Download - page 12

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MANAGING TRANSPORTATION AND DISTRIBUTION MORE EFFECTIVELY
REDISTRIBUTION CENTER NETWORK
SYSCO’s National Supply Chain Initiative is improving
not only our business but our entire industry. We believe
that by investing in our supply chain infrastructure,
and broadening demand visibility between customers
and suppliers, we can better collaborate with both
customers and suppliers. This should dramatically
reduce total supply chain costs and allow SYSCO to
use resources more efficiently; improve forecasting,
fulfillment and replenishment processes; and manage
transportation more effectively.
The RDC network is the baseline for all the supply
chain initiatives. Although the Demand Planning and
Replenishment System (DPR) and the Transportation
Management System (TMS) are able to function
independently, these three initiatives in combination
are most effective at optimizing inventory levels,
freight costs and service levels. To identify RDC
locations, intricate, sophisticated computer models
pinpoint sites that will optimize inbound and outbound
freight costs and provide access to major roadways
and railways in areas that have the most favorable
infrastructure and an available workforce.
The Northeast RDC supports 14 SYSCO broadline
operating companies servicing customers in the
13-state Northeast Region. Customer orders that
flow from each of those companies are aggregated
into one order through the RDC, reducing ship-to
destinations. By creating predictable and reliable
orders, the process is also simplified for suppliers,
allowing them to plan production more efficiently.
At the Northeast RDC, we inventory approximately
20,000 SKUs. The operating companies that are
supplied by this RDC are now realizing many of the
benefits we initially envisioned, and we are becoming
even more efficient at moving products from
suppliers to customers.
DEMAND PLANNING AND REPLENISHMENT
Product demand forecasting is crucial to the success
of the redistribution function. DPR is the core of the
supply chain infrastructure and the engine that drives
both the RDC and TMS functions. Implementing
the system in operating companies well prior to
transitioning to the RDC environment has been
essential in helping them streamline the significant
process changes that occur during the switchover.
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