Wegmans Distribution System

Introduction
Wegmans supermarket chain has been cited as a leader in the supply chain management in the grocery industry. Wegmans operates a number of warehouses that are used to supply its stores. Some warehouses stock grocery items, while some others stock frozen foods and still others stock bakery products.

Distribution
Individual store orders are generated on a daily basis. The warehouse downloads the order to its information system and order fulfillment begins. Various methods are used to replenish stores inventories.

 Several of these avoid the need for warehouse storage saving the company storage and handling costs. The methods are:
Cross dock Cross distribution Vendor-managed inventory

 Warehouse replenishment items are handled as full pallets or broken down into cases depending on the quantities ordered
Block pick Case pick

Incoming orders are checked against incoming shipments of stocks to determine the items that can be shipped by cross docking or cross distribution.

Warehoused items
The retrieval system of warehoused items is semi-automated and requires only a few workers. Warehoused items are classified based on their packaging and volume into
Conveyor items Non-conveyor items

Information system

Receiving an order

Conveyor items

Non conveyor items

Scanning

Items are wrapped and palletized

Items are wrapped and palletized

Loaded on a truck and shipped to a particular store

Collaboration with vendors

Wegmans collaborated with vendors in order to improve packaging design so that conveyor belt transporting can be done for the goods. Improved packaging increases the number of goods that can be handled by the conveyor system.

Forecasting
In 2002, Wegmans implemented its program of consistent low pricing. This program had the following advantages
Reduced the number of promotional and sale items. Reduced the volatility in demand to a large extent. Made forecasting and inventory planning easier.

New approaches
In 2003, Wegmans began exploring the use of auto-ID tags. The tags are very small micro-chips similar to bar codes. The tags offer a greater potential for supply chain management.