Supply Chain Woes? Innovative Partnerships Are the Way Out

Navigating the grocery supply chain has become increasingly complex, making it no less mission-critical for grocers to adapt accordingly to enhance their efficiency and set themselves up for long-term success.

Disruptions in the supply chain pose significant challenges for both retailers and suppliers. Retailers may face stockouts, higher costs, and longer lead times, making it difficult to manage inventory levels and meet customer demands, ultimately risking lost sales and customer dissatisfaction. On the other hand, suppliers can experience inventory shortages, delivery delays, and increased operational costs, which can lead to lost sales, strained customer relationships, and a damaged reputation.

KeHE^® is focused on supporting retailers and brands every step of the way. Efficient warehouses, seamless network designs, and aggregated inventory management are the key to doing so, ensuring that the supply chain operates at full capacity. By streamlining behind-the-scenes functions and strategically allocating resources, KeHE sets grocers up to consistently provide consumers with the natural & organic, specialty, and fresh products they love on the shelves.

KeHE has the infrastructure to overcome challenges and remain competitive in the ever-evolving industry.

Opportunity Cost: Onboarding Technology in Evolving Landscapes

Technology has the potential to solve many supply chain problems, but heavy innovation can leave grocers scrambling to keep pace. In fact, only 9% of grocers have the analytic talent to manage supply chain data and implement innovative tools that are quintessential to adapting to industry changes. 

New technology such as artificial intelligence (AI) presents opportunities to predict sales and streamline ordering, but many legacy systems lack native AI, and even automated solutions require onboarding and infrastructure considerations that may call for a lot of effort before grocers can fully enjoy the benefits.

Additionally, more traditional challenges such as inflation are still a factor grocers must consider. This impacts narrow margins and puts greater emphasis on sustainability and efficiency initiatives, which have clear long-term benefits. However, this can be expensive to implement, document, and refine. Missed deliveries and sellouts, as demonstrated by the Canadian Rail port strikes that took place in 2024, caused grocers to lose customers due to lack of availability, which negatively impacted their bottom line.

Solving Supply Chain Challenges

Due to KeHE’s iterative customer process, the key challenges facing grocers have been optimized through modernization of its supply chain infrastructure. KeHE’s commitment to staying ahead of the curve in technological advancements provides its suppliers and retailers with consistent, high-value opportunities.

• Adopted a Transport Management System (TMS): When utilizing TMS, grocers have the ability to know exactly when they can expect to fill their shelves with products. With this new system, KeHE has increased on-time performance by 10%, reduced lead time and lowered carrying costs, optimized truckloads and routing to lower cost-per-pound, and enhanced overall supply chain visibility for partners.
  
  
• Integrated Demand Forecasting and Inventory Optimization (DFIO) System: The enhanced coordination between logistics and procurement teams has been an essential driver for more efficient handling of multi-temperature shipments. The new DFIO system provides KeHE with an enhanced capability to predict store-level forecasting, leading to reduced spoilage. These efficiencies support the grocer’s bottom line and ensure that when customers are purchasing products off the shelves, they are fresh and high-quality. This system also supports the growth and scale of KeHE partners with 24/7 website and mobile app ordering, access to digital marketing support and scanning technology.
  
  
• Refined Transportation Routing Guides: These transportation routes improve KeHE efficiency across the board and reduce costs through historical data and analytics to identify the most efficient routes. It also provides KeHE with direct insights from carriers to adjust routes based on their feedback. Aggregating all this data into one place informs key performance indicators (KPIs), harnessing KeHE with the power to monitor the effectiveness of the routing guide to make necessary adjustments over time. Refined routes also optimize transportation costs and streamline the supply chain with centralized locations for all shipping information and procedures, leading to more efficient deliveries and operations that retailers and suppliers can depend on.
  
  
• Reassessment of KeHE’s Network Footprint: By analyzing the network footprint to better integrate benchmarking, KeHE can compare network performance to industry standards for Truckload and Less-Than Truckload best practices. This allows retailers and suppliers to benefit from faster delivery times, reduced costs through managed logistics, and better inventory management to exceed consumer expectations. It also lays the foundation for KeHE to identify where operations can be improved so they can optimize costs, enhance efficiency, and ensure shipping processes are aligned with market expectations.
  
  
• Alternative Revenue Streams: Through these additional services, KeHE equips suppliers with greater opportunities to build their brand, increase their reach, and generate revenue from a wide variety of products. By tapping into new revenue streams, KeHE has been able to diversify service offerings for its suppliers and customers. Ranging from managed and consulting services activities, carrier brokerage services, assets management, freight under management programs, warehouse and consolidation, as well as being the end-to-end logistics solution for its partners.

Iteration and Innovation for Today and Tomorrow

To take advantage of new capabilities and technological advancements, KeHE has scaled its physical availability in terms of drivers and available locations to meet the needs of its partners. Currently, 95% of the North American population lives within five hours of KeHE’s 17 distribution centers. Serving more than 30,000 stores with ambient, refrigerated, and frozen capabilities, KeHE equips its partners with access to real-time order visibility and delivery alerts.

KeHE is committed to providing safe and ethical working conditions for its 700 drivers, who collectively cover more than 50 million safe miles annually and handle an average of 13,500 deliveries each week. KeHE’s dedication to ensuring driver safety is integral to meeting the high expectations and efficiency promised to its customers.

Supporting retailers and brands is about more than just ensuring KeHE functions as efficiently as possible. It’s about strengthening and improving the things that KeHE does on a daily basis to ultimately better serve its partners. The bottom line: connecting data and teams across KeHE’s organization enhances the customer, supplier, and employee experience.