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Case Study: Vietnamese Supermarket Chain

“With a growing and evolving market, we need to prepare for growth through improvement in efficiency and people capability”

The Situation:

  • Vietnamese economy growing rapidly (6% per year)
  • Changing demographics in the population
  • Existing processes very manual
  • Seeking to improve efficiency and people capability in anticipation of growth, with an automated DC and major change program

The Outcome:

  • DC design on track to reduce footprint by 10% and overall costs by 10%
  • Inventory reduced 5%
  • Transport costs reduced 5%
  • Pick productivity improved by 25%
  • People capability improved among current and emerging leadership
  • Outcomes exceeded original targets

The Client

A leading supermarket chain in Vietnam.

The Situation

The Vietnamese economy was experiencing strong growth of 6% per year, with a growing youth population and middle class with varying needs. The client’s existing processes were very manual, so opportunities existed to improve efficiencies and improve its people capability to support growth. The client partnered with XAct Solutions to respond to the changing market and improve its supply chain by implementing an automated DC and a major change program.

The Process

We had four key objectives to implement the major change program successfully:

  • To develop solutions that consider the impact across Buying, Logistics and Stores
  • To identify business improvement projects to drive process improvements, enable change and realise early business benefits
  • To improve people capability by partnering XAct Solutions resources with the client’s resources, leveraging best in class experience with local experience
  • To enable alignment and ownership of change by Business Owners through the client’s project team members and monthly Steering Committee meetings.

To meet these objectives, our approach was threefold:

Operational Program

An Operational Program was put in place to define warehouse processes and flows, considering the end-to-end supply chain impact, and to determine the Network Master Plan and roadmap for the new network.

Physical Infrastructure Program

A Physical Infrastructure Program was established to develop the land and building requirements, to procure the building contractor, to manage the building process and fit-out integration, and to commission the building and services.

Business Improvement Program

A Business Improvement Program was created to reduce excess inventory at the network level, to reduce supply chain cost, and to improve DC pick productivity. It also sought to optimise transportation to reduce costs and to deliver on time to stores and to promote cultural change and improve the capability of the client staff in preparation for the new distribution centre and future growth.

The Outcome

The outcomes of these changes exceeded original targets. The new DC design is on track to reduce footprint by 10% and to reduce overall costs by 10%. The Business Improvement Program reduced inventory and transport costs by 5% and improved pick productivity by 25%. We were able to improve people capability through the emergence of future leaders, and the CEO and senior leaders are owners of the major change program. The benefits derived through the Business Improvement program are funding the costs of the Major Change Program.