Supply Chain Restructuring at Sainsbury' Supermarkets Limited


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Case Details:

Case Code : OPER094
Case Length : 18 Pages
Period : 2000-09
Organization : Sainsbury's Supermarkets Limited
Pub Date : 2010
Teaching Note :Not Available
Countries : UK
Industry : Retail

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

A New Supply Chain

One of the main problems with Sainsbury's was its outdated supply chain which could not cope with the growing demands of the consumers. Total supply chain costs as a percentage of sales were also higher at Sainsbury's compared to the other top retailers. While typical depot life was 20 years, Sainsbury's depots were 19 years old, and the key systems were also about 20 years old...

Implementation of New Supply Chain

In late 2000, Sainsbury's launched the '7-in-3' supply chain management program aimed at overhauling the existing supply chain and IT systems in the company.

The revamping of the supply chain covered four key areas - network renewal, systems & technology, processes & partnerships, and people & culture (Refer to Table III for more about the areas chosen for revamping the supply chain)...

Problems Crop Up

The year 2003, however, saw a reversal of fortunes for Sainsbury's. The company's performance relative to its competitors started to decline. Around the same time, Asda, which was using an 'Everyday Low Price' (EDLP) strategy, started gaining popularity. For the four weeks ending July 20, 2003, Asda overtook Sainsbury's to become the second largest supermarket group for the first time...

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