SpartanNash streamlines pallet operations

SpartanNash is more accurately anticipating pallet inventory and management throughout its network. 

Seeking to improve operational efficiency and profits, the grocery retailer/distributor performed a holistic review of its end-to-end supply chain network with existing partner CHEP, a provider of circular, end-to-end pallet and storage solutions. 

Based on this review, CHEP provided recommendations including strategic shifts in pallet flows designed to solve network gaps, reduce days holding inventory and minimize costs; as well as enhanced reporting to minimize inefficiencies. 

Results of SpartanNash enacting CHEP’s recommendations have included:

• In a four-year period, SpartanNash experienced a 33% reduction in the average number of days that pallets remain in its network before they continue through the supply chain. Returning pallets faster averted 3.5 million pounds of CO2 by quickly replenishing the pallet pool and reusing existing resources.
• In 12 months, SpartanNash eliminated up to 216,000 empty transport miles, or the equivalent of 725,000 pounds of CO2, by leveraging its private fleet. By strategically picking up or delivering pallets to service center locations or other CHEP customers, pallet flow was optimized and contributed to SpartanNash’s ESG efforts. 
• In 12 months, SpartanNash also reduced CO2 emissions by 26.4 million pounds, saved wood resources by 458,321 board feet, and reduced waste by 2.6 million pounds.

In addition, SpartanNash now more accurately anticipates its pallet inventory month-over-month to ensure these assets are where and when they are needed. This increase in asset efficiency has driven cost savings for SpartanNash by improving its flow-through ratio. 

To reduce transportation miles and costs incurred while collecting and returning pallets from one particular partner, SpartanNash worked with CHEP to rethink its regional pallet flow near that partner. Now, the company transfers the pallets to the customer for them to manage the pallet return themselves. This initiative has eliminated excess costs of more than $150,000 annually and streamlined pallet return logistics.

Through this strategic partnership, SpartanNash and CHEP will continue to identify and implement efficiencies and cost savings initiatives across the supply chain.

"We required more than a pallet partner, we really needed a strategic partner to aid in delivering the ingredients for a better life and helping us establish the proper priorities," said Dustin Manning, VP of finance, SpartanNash. "The CHEP team provided this support, and the results reflect this effort and the strength of the relationship."

SpartanNash is also attempting to streamline inventory management by expanding its use of the Upshop Magic inventory and replenishment optimization application in an effort to consolidate its ordering systems, maintain accurate planograms, and assist with merchandising reset planning in both the center store and the produce department.

In addition, the company is implementing the Simbe Tally autonomous inventory robot in company-operated stores across the Midwest. Tally traverses store aisles throughout the day, leveraging 3D computer vision technology to collect shelf data. It can capture 15,000 to 30,000 products an hour.

The core businesses of SpartanNash include distributing grocery products to independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges. The company also operates a fresh produce distribution network and the Our Family brand. SpartanNash serves customer locations in all 50 states and the District of Columbia, Europe, Cuba, Puerto Rico, Honduras, Iraq, Kuwait, Bahrain, Qatar, and Djibouti. The company owns 145 supermarkets—primarily under the banners of Family Fare, Martin's Super Markets, D&W Fresh Market, VG's Grocery and Dan's Supermarket.