Sysco's Supply Chain Management Practices

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Case Details:

Case Code : OPER060
Case Length : 19 Pages
Period : 2001-2006
Organization : SYSCO Corporation
Pub Date : 2006
Teaching Note : Available
Countries : North America
Industry : Foodservice Distribution

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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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Supply Chain Management Initiatives

In 2003, a study of the five-year annualized total return on capital of different corporations in the food market sector in the US revealed that SYSCO was one of the best in the market with an estimated return of 22.3 percent (Refer to Table I for the list of corporations in the study). One of the many reasons for SYSCO's better performance over its competitors was that it kept distribution costs under control, which was possible due to its supply chain management practices and extensive use of information technology (Refer to Exhibit VI for the brief profile of SYSCO's competitors). For a distribution company such as SYSCO, efficient supply chain management was crucial for the growth of the company...

Information Technology in the Supply Chain

SYSCO partnered with Indian software giant Infosys Technologies Limited (Infosys), in 2001, to improve cost and service efficiencies across its supply chain. The company identified the OCs as the key points in enhancing supply chain efficiencies and devised a strategy to create mid-point distribution facilities called redistribution centers (RDBCs) (Refer to Exhibit VIII on the importance of redistribution centers in a food distributors supply chain)...


Analysts noted that SYSCO had committed itself to maximize its supply chain efficiencies through continued investment in initiatives like the National Supply Chain Project. Given SYSCO's success in the foodservice distribution business, they felt that the main obstacle for it would be if the company became complacent of its own success. Some analysts were also concerned about the slowing growth prospects for the company. However, Schnieders opined that even though SYSCO was the largest foodservice marketer and distributor in North America, it only had a 14 percent market share and there were plenty of opportunities for long-term growth...


Exhibit I: Sysco's Product Mix
Exhibit II: Sysco's Logo
Exhibit III: Sysco's Customer Mix
Exhibit IV: Map Showing Sysco's Operations in North America (as of August 2006)
Exhibit V: Sysco's Income Statement
Exhibit VI: Brief Profile of Sysco's Main Competitors
Exhibit VII: Chefex Order Process
Exhibit VIII: Importance of Redistribution in a Food Distributors Supply Chain
Exhibit IX: Truck Unloading Time for an Rdbc and a Non-Rdbc Truck
Exhibit X: Seven Priority Areas of Sysco's Strategic Development Process


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