Campbell’s continuous

replenishment program

Retailers
Establish inform Campbell Campbell
electronic Campbell forecasts replenishes
data about future stock at
interchange demand and inventory retailers on
with inventories levels based the same
retailers electronicall on data day
y

Impact: Reduction of inventories of participating retailers from 4 weeks to 2

weeks
How: By reducing lead times as it has the knowledge of inventories of suppliers
Lessons learnt
■ Physical efficiency critical for a functional product such as soup
■ 2 week reduction in inventory led to 50% rise in profits for retailers
■ A profitable retailer provides prominent shelf space for our products which in
turn leads to increase in sales- Sales grew twice as fast in participating
retailers
■ Consumers offer predictable demand in exchange for a good product and
reasonable price
■ This model illustrates a different way of supply chain partners to interact for
higher profits
■ A company can get huge profits by getting supplier cut price by 1 penny and
by getting customer to accept one cent price increase
■ Manufacturer and retailer cooperate to cut costs throughout the supply chain
■ Pitfall: Companies playing both cooperative and competitive strategies at
same time. But will it work?