Koninklijke Vezet has been doing Shared Ware housing for its biggest client Albert Heijn for over a decade. The fruit and vegetable processing company manages stocks in the supermarket chain's distribution centres. The prerequisite for success? Sharing data, believes Anouk Wissink, director of Supply Chain & New Business at Vezet. "I think many parties are still anxious about this. But by sharing data, you can exploit the Shared Warehousing concept much better."
Vezet works with Albert Heijn according to the Vendor Managed Inventory(VMI) principle; stocks in Albert Heijn's distribution centres are managed by the supplier. Vezet supplies five distribution centres of Albert Heijn for five blocks per day. "We have to predict what Albert Heijn is going to order. It's up to us to have the right stock there. We are actually assessed 25 times a day."
The challenge in forecasting is in volatility. As a supplier of fruit and vegetables, Vezet faces volatile demand on the front end. "The weather is very decisive for what people eat. At 0 degrees, consumers want pea soup, while at 10 degrees it is eaten much less. There is a lot of action pressure on our range." Vezet also has to take external conditions into account when supplying raw materials. "Our product is very weather-dependent. Snails in the lettuce or a hailstorm, you can't do much about it. Normally you catch that by keeping stock. But because we have such a short THT, we can't do that. The challenge is to forecast as well as possible with that volatility and the impossibility of keeping stock."
Strategic partnership
Vezet does this forecasting in close cooperation with Albert Heijn. Wissink: "We have a strategic partnership in which we share the forecast with each other. Albert Heijn is incredibly good at this. They forecast as well as possible what they see in the shop, what they expect from the promotions, etcetera. The Store Demand Forecasting that follows from that they pass on to us seven times a day. That works enormously well for a large group of items that are slightly less weather-dependent. We take that forecast one-to-one." For products that are weather-dependent or in action, Vezet handles the forecasting itself. "For this, we monitor the weather and progress ourselves. That is also our focus and we are good at it." Then there is a small group of products that are low rotation, for which Vezet deploys a fixed forecast.
Reluctance to share data
"We have the advantage that our customer facilitates a lot of forecasting," says the director of Supply Chain & New Business about the collaboration with Albert Heijn. "What needs to be in the distribution centres and is there still enough room in the production process to produce that? That is not only the order to the supplier, but also to the customer. And Albert Heijn has set that up very well."
A far-reaching collaboration such as that between Albert Heijn and Vezet requires trust. After all, the customer has to share data with the supplier. "Sharing information can be one thing. We have been working with Albert Heijn for 40 years, so that trust relationship was already there. Moreover, the chain benefits. Albert Heijn does not have to take care of stock management, nor does it bear the responsibility. On the other hand, they do share the Store Demand Forecast and other data with us."
Wissink understands clients' reluctance to share data, but still sees it as a prerequisite for the optimal supply chain. "I think there is still a fear that parties will make off with that information. But that shouldn't stop you from optimising your chain. After all, you are going to notice it in the costs in the end. If you make good agreements about data and how to deal with it, it ultimately benefits both the customer and the supplier."
During the Logistics Day on 6 February, Anouk Wissink will give a session on Shared Warehousing.This edition's theme is: Sharing is (s)caring. 'Sharing business is scary, but can open new doors at the same time' As a partner of LogistiekProfs, you will receive a €75 discount on participation ovv LGP75. Look here for more information and registration.
