FoodWorld (B): Supply Chain Strategy

Abstract

FoodWorld is a division of Spencer's, the retailing company of RPG Enterprises (RPG). This case focuses on the supply chain strategy. The key issues were 1) what to stock, 2) where and whom to source from, 3) how to reduce total delivery time from vendor to store and 4) how to reduce the cost of procurement. At the time of writing the case FoodWorld operated with over 6000 stock keeping units (SKUs), but was planning to rationalize at closer to 3000. The efforts on sourcing were to go as directly upstream as possible. This was also expected to reduce time and cost of procurement. These issues were rendered more significant with FoodWorld seeing growth opportunities in a) perishables and non-branded groceries and b) an increase in the number of outlets from the current (late 1998) 19 to 50 by 2000, and even more in the future.