Company Overview
Metro Distributors is a leading FMCG distribution company serving retail outlets across Western India. Operating 5 regional warehouses, they distribute over 2,000 SKUs from major brands including HUL, P&G, Nestlé, and ITC to thousands of kirana stores and modern trade outlets.
The Challenge
Metro's multi-location distribution network created a complex inventory balancing problem that their existing systems couldn't solve.
The Inventory Imbalance Problem
While the central warehouse in Ahmedabad was overstocked with 45 days of inventory, regional warehouses in Surat, Rajkot, and Vadodara frequently ran out of fast-moving items. The same SKU could be excess in one location and stockout in another, just 200 km away.
12% Stockout Rate at Regionals
Regional warehouses experienced a 12% stockout rate on average, meaning retailers couldn't get what they needed. This drove retailers to competitors and damaged Metro's relationship with both brands and outlets.
₹15L Monthly in Emergency Transfers
To address stockouts, Metro resorted to expensive inter-warehouse transfers. Trucks ran half-empty between locations daily, sometimes making emergency trips for single high-value items. Transportation costs were eating into margins.
"We had the inventory in our network — it was just in the wrong place at the wrong time. Our warehouse managers were constantly on the phone arranging transfers while retailers waited for stock."
— Anil Mehta, Supply Chain Head, Metro Distributors
The Solution
Metro implemented Decisio's multi-location inventory optimization module:
1. Regional Demand Forecasting
Orion built separate demand models for each warehouse catchment area, accounting for local factors like festivals, demographics, and retail channel mix.
- Location-specific seasonality patterns (Navratri in Gujarat vs Diwali everywhere)
- Channel-wise demand differences (kirana vs modern trade)
- New outlet expansion impact on regional demand
2. Network Inventory Optimization
Nova optimized inventory across the entire network, not just individual locations. It calculated optimal stock levels considering:
- Service level requirements by location and product
- Transfer costs and lead times between warehouses
- Central vs regional stocking decisions
3. Proactive Rebalancing
Instead of reactive transfers, Decisio recommended proactive stock movements based on predicted demand, allowing planned transfers at lower cost.
Implementation
Results After 6 Months
Service Level Transformation
- Stockout rate dropped from 12% to 1.8%
- Fill rate improved from 76% to 88%
- Retailer satisfaction scores up 24 points
Cost Savings
- Emergency transfers reduced by 80%
- ₹12L monthly savings on transportation
- Inventory carrying cost down 18%
Operational Efficiency
- Planned transfers consolidated into weekly schedules
- Warehouse capacity better utilized across network
- Supply chain team focuses on exceptions, not firefighting
"The savings from reduced transfers alone justified the investment. But the real win is that our retailers trust us again. When they call for stock, we have it. That's brought back business we'd lost to competitors."
— Anil Mehta, Supply Chain Head, Metro Distributors
Key Takeaways
- Think network, not location: Optimize inventory across all nodes together
- Proactive beats reactive: Planned transfers cost 60% less than emergency ones
- Regional differences matter: One-size-fits-all stocking policies fail
- Data visibility first: You can't optimize what you can't see in real-time