Project: Supply Chain Cost Optimization for TrulyFresh

Project Title:

Optimizing Supply Chain Costs for TrulyFresh’s Current Product Line

Project Duration:

4 weeks

1. Project Objective:

The primary goal of this project is to reduce overall supply chain costs for TrulyFresh’s current
product line, including plants, gardening tools, pots, and DIY kits, without compromising service
quality. The optimization will focus on enhancing operational efficiency, lowering logistics
expenses, and improving procurement and inventory management.

2. Key Deliverables:

 Cost-Reduction Roadmap: Detailed plan outlining potential cost-saving initiatives

across the supply chain.
 Vendor & Supplier Analysis: Review and renegotiation of vendor contracts to reduce
procurement costs.
 Inventory Management Optimization: Develop strategies to improve inventory
turnover and reduce holding costs.
 Logistics Efficiency Plan: Streamline transportation, warehousing, and last-mile delivery
to reduce shipping costs.
 Forecasting & Demand Planning: Implement demand planning tools to avoid
overstocking and reduce wastage.
 KPI Tracking Dashboard: Setup metrics to monitor cost reduction progress and ensure
sustainability.

3. Focus Areas:

A. Procurement & Vendor Management:

 Objective: Reduce costs of raw materials (e.g., pots, soil mix, tools) through strategic
sourcing and vendor negotiations.
o Actions:
 Conduct a vendor performance analysis to identify cost discrepancies.
  Renegotiate contracts with existing suppliers for better terms and bulk
discounts.
 Explore alternative suppliers for cost-effective sourcing of raw materials.

B. Inventory Management:

 Objective: Minimize excess inventory and holding costs while ensuring sufficient stock
for smooth operations.
o Actions:
 Implement just-in-time (JIT) inventory techniques to avoid overstocking.
 Review inventory levels for low-margin products and optimize
replenishment cycles.
 Introduce automated inventory management systems to improve tracking
and reduce manual errors.

C. Logistics & Distribution:

 Objective: Reduce transportation and distribution costs while maintaining delivery speed
and reliability.
o Actions:
 Optimize delivery routes to reduce fuel costs and improve delivery
efficiency.
 Explore partnerships with third-party logistics (3PL) providers for cost-
effective shipping solutions.
 Assess warehouse locations and explore regional warehousing options to
minimize shipping distances.

D. Packaging Optimization:

 Objective: Cut packaging costs while maintaining product protection and sustainability.
o Actions:
 Review current packaging materials and explore cost-effective alternatives
(e.g., bulk orders, eco-friendly options).
 Standardize packaging sizes to reduce material waste and simplify
logistics.
 Collaborate with suppliers to reduce packaging weight and optimize space
usage in transport.

4. Supply Chain Technology & Automation:

A. Demand Forecasting Tools:

 Objective: Improve forecasting accuracy to avoid under stocking or overstocking

products.
 o Actions:
 Implement demand forecasting tools to predict sales trends based on
seasonality and market data.
 Align production and procurement schedules with forecasted demand to
avoid wastage.

B. Process Automation:

 Objective: Automate routine tasks to reduce manual labor costs and improve accuracy.
o Actions:
 Use automation in inventory tracking and reordering processes.
 Implement automated reporting for real-time visibility into stock levels,
order status, and costs.

5. Transportation & Last-Mile Delivery:

Objective: Optimize transportation and last-mile delivery to reduce costs and improve
delivery speed.

 Actions:
o Optimize shipping routes using data analytics to reduce time and fuel
consumption.
o Collaborate with courier services to negotiate better bulk shipping rates.
o Introduce zone-based pricing strategies to manage shipping costs based on
delivery distance.
o Evaluate the feasibility of in-house delivery options for specific zones to save on
courier costs.

6. Supplier Relationships & Consolidation:

Objective: Build stronger supplier relationships to enhance cost negotiations and

streamline procurement.

 Actions:
o Work closely with key suppliers to consolidate shipments, reducing handling and
transportation costs.
o Create supplier performance metrics to ensure consistency in cost and quality.
o Explore opportunities for vertical integration by partnering with raw material
suppliers.
7. KPI Tracking and Performance Measurement:

 Procurement Savings: Track savings generated from vendor negotiations and strategic
sourcing.
 Inventory Turnover Rate: Monitor improvements in inventory management and stock
movement.
 Cost per Delivery: Measure reductions in transportation and delivery costs.
 Fulfillment Costs: Analyze and reduce per-unit packaging and fulfillment costs.
 Stockout & Overstock Levels: Keep track of stockouts and overstock incidences to
minimize inefficiencies.

8. Project Timeline:

Phase Duration Key Activities

Conduct cost analysis, vendor review, and inventory
Week 1: Discovery & Analysis 1 week
assessment
Develop cost-reduction strategies for procurement,
Week 2: Strategy Development 1 week
logistics, and inventory
Implement procurement changes, optimize logistics, set
Week 3: Implementation 1 week
up automation
Week 4: Review & Final Measure KPI success, make final adjustments, create
1 week
Adjustments sustainability plan

9. Expected Outcomes:

 % reduction in overall supply chain costs by optimizing procurement, inventory

management, and logistics.
 Improved supplier relationships resulting in better pricing and delivery terms.
 Enhanced inventory turnover and reduced holding costs by aligning stock levels with
demand.
 Streamlined logistics operations with lower transportation and last-mile delivery costs.

This four-week project aims to significantly optimize TrulyFresh’s supply chain operations by
reducing costs and improving efficiency across procurement, logistics, and inventory
management.