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Sainsbury's Supply Chain Transformation Case Study Examination

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In order to response to the loss of market leader status in current competitive market environment, Sir Peter Davis, CEO of the Sainsbury's Group, decided to commence a project called "7-in-3" supply chain management project in late 2000. Company's Supply Chain Director, Martin White, summarized the 4 key principles of "7-in-3" supply chain strategy.
Rises of automated fulfillment factories and primary consolidation centre. Due to Sainsbury's competitor - ASDA is moving forward aggressively, Sainsbury's top management noticed that ASDA has an information system that provided a more efficient supply chain. This system pleased customers, improving the ASDA's market share and increasing the company's profits. So that Sainsbury's decided to replace the current depots of company with automated factories and consolidation centre. This change will make the existing distribution centers into new automated distribution facilities. The improved efficiency from this modification is clear, it reduced shipping departure time, it can cover more stores, it works for 24 hours with a sortation system. This is a good example of saving the time and money. But there is one thing that top management did not consider well which is the cost of highly automated system actually requires more money to install and implement. Especially like Sainsbury's, it seeks to replace the old system with the new automation system.
"End-to-end" plan to manage transportation. Sainsbury's seeks out a way to reduce both transportation costs and goods costs. For reducing the transportation/warehousing costs, Sainsbury's developed a new transportation system to control suppliers' transportation and warehousing. With the high visibility, it is enable to make sure that the competitive costs will be satisfied and profits being increased. The company also noticed that fuel costs from previous years, and they are

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