SKU Rationalization

Background:

Our client, a long-standing presence in the food and beverage industry, has become a leading coffee and tea supplier to businesses across North America. Since its founding, they have expanded to offer a wide range of coffee, tea, and related products, serving diverse sectors such as restaurants, hotels, and convenience stores. Through decades of growth and evolution, they have established themselves as a key partner for businesses seeking high-quality and consistent supply.

However, as the market evolved and external pressures, including those impacting their supply chain, mounted, they recognized the need to re-evaluate their operational processes. 

Challenge:

Before partnering with J. Gardner Group, our client faced a series of interconnected challenges that were impacting their operational efficiency and market position. These were not isolated issues; they represented systemic complexities that required a strategic and collaborative approach to overcome.

• Decision-Making Gridlock:
  A hesitancy had taken root within the client team, hindering their ability to make swift, confident decisions. This created bottlenecks in key processes and slowed down their responsiveness to market changes.
• Supply Chain Inefficiencies:
  The company was struggling with a fragmented supply chain, characterized by:
• Difficulties in identifying and partnering with the optimal suppliers.
• A lack of streamlined processes in sourcing and inventory management.
• An overwhelming number of coffee, sugar, and syrup vendors to manage.

• SKU Proliferation and Overcomplexity:
  The company was grappling with an unmanageable number of SKUs (over 2,500), creating a logistical nightmare and hindering their ability to focus on core products. This complexity was further compounded by multiple SKUs for single products, such as nine different SKUs for a single salad dressing and 25 for a single type of coffee.Despite repeated efforts, our client had been unable to effectively consolidate their SKUs, indicating a need for a more strategic approach and specialized expertise.

• Pandemic-Induced Supply Chain Disruptions:
  The global pandemic exposed vulnerabilities in their supply chain, leading to:
• Significant difficulties in bringing products into their network.
• Inventory shortages and the inability to meet customer demand.
• Customer resistance to accepting replacement SKUs, further complicates matters.
• Delays of 30-45 days due to disruptions in overseas shipping.

• Compromised Service Levels:
  The combined effect of these challenges resulted in compromised service commitments to their customers, threatening their reputation and long-term relationships.

• Lack of Actionable Insights:
  While data was available, they lacked the tools and processes to translate this information into actionable insights for strategic decision-making.

J. Gardner Group’s Solution:

Understanding the client’s need, J. Gardner Group embarked on a comprehensive strategic intervention designed to address the root causes of their operational challenges and build a resilient, future-focused supply chain. Our approach was centered around collaboration, data-driven decision-making, and empowering their team, all while focusing on the specific areas highlighted in their experience:

• Fostering Collaborative Decision-Making:
  Recognizing the team’s previous hesitancy in decision-making. J. Gardner Group facilitated a collaborative environment, bringing together SMEs from every department to identify the core issues and develop solutions together. This approach not only fostered a shared understanding of the challenges, but also empowered the team to move forward with confidence.

• Optimizing SKU Management:
  Addressing the challenge of an overwhelming number of SKUs, we worked with the company to streamline their product portfolio. This involved analyzing the performance of each SKU and identifying opportunities to consolidate offerings while ensuring that customers would not be adversely affected.

• Strategic Supply Chain Partnering:
  We focused on building stronger relationships with key suppliers and identifying opportunities to optimize their existing supply chain. This included analyzing the different sourcing options, evaluating the number of vendors, and finding ways to improve efficiency at every step of the process.

• Implementing Intuitive Data Technology:
  Recognizing the need for better data utilization, we introduced a new, intuitive technology platform that allowed the client to:
• Access and analyze data in real-time, gaining actionable insights into their operations.
• Run various scenarios, enabling them to make proactive decisions and minimize disruptions.
• Move away from relying on complex reports and towards a more user-friendly approach to data.

• Empowering the Team Through Action:
  We focused on empowering the team to embrace action and take ownership of their processes. We encouraged them to ask more questions, make more confident recommendations, and embrace the changes necessary to build a more resilient supply chain.

The Outcomes: A Resilient Supply Chain and a Culture of Strategic Action

The strategic partnership between the company and J. Gardner Group yielded tangible results, transforming their operations and empowering their team to navigate future challenges with confidence and agility. The impact was clear across several key areas:

• Empowered Decision-Making:
  The team, once hesitant, now operates with a renewed sense of confidence and ownership. They have embraced a more business-focused approach, making proactive decisions to ensure consistent product availability for their customers. This shift has led to greater agility and responsiveness to market demands.
• Optimized Supply Chain Performance:
  By streamlining their processes and focusing on efficiency, the company achieved a more agile and responsive supply chain. This included:
• A reduction in the number of suppliers, which has simplified management and reduced costs.
• A more manageable SKU portfolio, allowing them to focus on core offerings and improve inventory control.
• A better understanding of their supply chain dynamics, leading to more proactive decision-making.

• Enhanced Resilience to Disruptions:
  The company significantly reduced the impact of supply chain disruptions, particularly those stemming from external factors. They were able to mitigate delays, manage shortages more effectively, and maintain a more consistent service level for their customers. 

• Intuitive Data-Driven Insights:
  The implementation of J. Gardner Group’s technology platform provided the team with access to powerful, intuitive data insights. This has empowered them to:
• Quickly analyze information and run various scenarios.
• Make data-informed decisions that drive efficiency and reduce risk.
• Move away from relying on complicated reports and towards a more user-friendly approach to data analysis.

• A Culture of Proactive Action:
  The team embraced a culture of continuous improvement, asking more questions, taking ownership of their processes, and making recommendations with confidence. This shift has empowered them to address future challenges with a strategic mindset and a proactive approach.