1st Ahold Delhaize USA Facility Transitions to Self-Distribution
Ahold Delhaize USA has revealed that one of its distribution centers, Freetown Grocery in Massachusetts, became the first to transition procurement from a third-party vendor to the company’s self-managed network, resulting in direct control of inventory and replenishment at the facility.
“Our work to transform the supply chain to an integrated self-distribution model of the future is not only on time, but ahead of schedule,” noted Chris Lewis, EVP, supply chain for Retail Business Services, Ahold Delhaize USA’s services company. “Today marks an important milestone in our journey with the transition of procurement at this facility, and we’re looking forward to other facility transitions this year. On top of that, we’ve launched new programs to begin to help us as we optimize the network at scale.”
Founded in 2004, Freetown Grocery is a 1.1 million-square-foot facility fulfilling grocery demand for Ahold Delhaize USA’’s Stop & Shop grocery store banner. Stop & Shop continues to own the facility and fulfill orders, while ADUSA Procurement handles replenishment and inventory.
“This transition is an important one for the Stop & Shop brand, because it gives us more control and ultimately enables us to better serve our stores and our customers at more than 200 Stop & Shop locations across Massachusetts, Connecticut and Rhode Island,” said Jim Labrecque, VP of distribution operations at Quincy, Mass.-based Stop & Shop.
Freetown Grocery is one of several distribution centers transitioning services to the self-managed network this year: A fresh facility in Freetown, Mass.; a distribution center in Jessup, Md.; and a distribution center in Carlisle, Pa., are also among those that will transition. Additionally, ADUSA Distribution plans to debut new facilities in Mauldin, S.C., and Manchester, Conn., and construction is well underway for two fully automated frozen facilities.
Along the facility transitions, other key components of the transformation, such as evolving digital and technology, scaling procurement and modernizing ways of working, are also in progress, among them the new ADvantage program. ADvantage aims to facilitate better collaboration between Ahold Delhaize USA companies and suppliers, delivering growth, innovation and efficiency across the supply chain from product origin to the customer.
“By working smarter with suppliers through ADvantage, we will be able to drive a new era of collaboration to open new opportunities and create efficiencies,” explained Lee Nicholson, SVP, procurement at ADUSA Procurement, who is heading ADvantage. “The program officially launched on Jan. 1 with nearly 200 suppliers participating. We’re already seeing results from the increased focus on collaboration and driving mutual growth.”
In Dec. 2019, Ahold Delhaize USA revealed plans to transform and expand supply-chain operations on the East Coast, including a three-year strategy to move its U.S. supply chain into an integrated, self-distribution mode. The goals of the undertaking are to reduce costs, improve speed to shelf, strengthen relationships with vendors, and enhance product availability and freshness for customers.
Ahold Delhaize USA, a division of Zaandam, Netherlands-based Ahold Delhaize and the parent company for Ahold Delhaize’s U.S. companies Food Lion, The Giant Co., Giant Food, Hannaford, and Stop & Shop, as well as e-grocer Peapod; Retail Business Services, a U.S. support services company providing services to the brands; and Peapod Digital Labs, its e-commerce engine. Ahold Delhaize USA is No. 11 on The PG 100, PG’s 2020 list of the top food and consumables retailers in the United States.
