A leading global fast-food chain leveraged an AI-driven approach to supply risk mitigation

Summary:

The implementation of the AI supply chain visibility platform enabled a  leading global fast-food chain to identify alternative suppliers to improve resilience, optimize its supply network and save costs.

Client: 

A leading global fast-food chain

Problem Statement: 

A leading global quick-service restaurant chain was concerned about the impact of Brexit as it was exporting some key ingredients — sauces — from the U.K. for its outlets in continental Europe. 

Maintaining consistent and high-quality supplies was critical to their success. Recognizing these challenges, the chain sought a strategic partner to design and implement a robust supply risk mitigation strategy.

Results: 

• Product travel distances within the supply network were reduced by 25%.
• Exports from the U.K. were replaced with supply options located in continental Europe.
• Dependency on two primary suppliers for the sauces category was reduced from 81% to 70%, as additional qualified suppliers were identified.
• Projected annual savings on product costs and freight amounted to €3.2 million.
• Improved supplier relationships, greater reliability and transparency.

AI Solution Overview:

The fast-food chain partnered with GEP, a provider of procurement and supply chain solutions, to develop and implement a comprehensive supply risk mitigation strategy. GEP leveraged its expertise in digital procurement, supply chain visibility, and risk management. 

GEP developed a multi-source procurement strategy to reduce dependency on single suppliers for high-risk categories like perishable goods and packaging materials.

The process began with a center of gravity analysis to identify optimal strategic locations that would reduce delivery expenses and minimize lead times. Following this, the team conducted a thorough evaluation of current suppliers to assess their capabilities and geographic coverage. Armed with a clear picture of market dynamics and supplier capabilities, recommendations were formulated to enhance the supply network, considering distance and existing constraints.

To ensure the feasibility and cost-effectiveness of the proposed network changes, the recommendations were further validated using directional freight data. Additionally, a market scenario analysis was performed, and various network models were developed to explore potential supplier facility investment options.

GEP deployed its supply chain visibility platform, GEP NEXXE, leveraging big data, AI, and ML to provide real-time insights into supplier performance and inventory management across all tiers.

The team subsequently presented strategic recommendations and market alignment plans to ensure a smooth and efficient transition for the supply network improvements.

References: 

1. Global Fast-Food Chain Develops Supply Risk Mitigation Strategy With GEP. https://www.gep.com/case-studies/thank-you?sourcenid=9298&type=case_study&source_pageurl=https%253A%252F%252Fwww.gep.com%252Fcase-studies%252Fglobal-fast-food-chain-develops-supply-risk-mitigation-strategy-with-gep%253Fajax_form%253D1%2526_wrapper_format%253Dhtml

Industry: Retail

Vendor: GEP

Client: A leading global fast-food chain

Publication Date: 2024