Flow of Products: Kroger ESSAY

Flow of Products: Kroger

Flow of Products

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As with any company, the flow it’s products is not necessarily a guarded secret. Most companies start in the manufacturing phase and move toward network of distributors and then into the hands of the consumers. From start to finish, the process is not as simple as it sounds. In this process, products flow through various checkpoints and if certain conditions are not met, it could hinder the flow. Most companies use this generic model, however depending on the type of company some facets of this model could be different.
Kroger has 39 manufacturing plants across the US. In these plants, it manufactures its products. To be more accurate, only 40 percent of the corporate branded units are produced through these channels. Kroger uses a make or buy policy in which it decides though analysis whether or not it will make the items in house or buy them from other manufactures (Kroger, 2012, p. 26).
The next step in Kroger’s flow of products is its distribution network. Kroger has 34 distribution centers equipped with “state-of-the-art product handling systems, refrigeration, temperature and lighting controls” (Kroger, 2012, p. 40). Kroger states, “An important part of our Customer 1st Strategy involves investing in our logistics infrastructure to improve operation efficiency, lower costs, and upgrade product freshness, quality, and safety” (Kroger, 2012, p. 40). By investing in new technologies in the distribution channel, Kroger has been able to accomplish this goal of reducing energy consumption and saving money as they more efficiently and effectively get the products to the consumer.
Kroger has three tiers in its nationwide distribution network. The first tier services stores within a 200-mile radius with “quick turn and perishable products” and consists of” local dry grocery, perishables and freezer facilities” (Kroger, 2012, p. 41). According to Kroger, “These distribution centers also often serve as our company’s cross-dock centers for palletized merchandise that is going directly to a retail store” (Kroger, 2012, p.41).
The second tier provides items such as slower turn pharmaceuticals, HBC (health, beauty, cosmetic) items and dry grocery products to retail stores via regional centers (Kroger, 2012, p. 41). The regional centers enable Kroger to purchase large quantities at a low price. Kroger states, “The product is piece-picked, sleeve-picked, or case-picked depending on value and movement, and shipped directly to stores multiple times each week” (Kroger, 2012, p. 41). The last tier ships “seasonal, promotional and other general merchandise products from suppliers around the world to stores in an even larger geography than the regional centers” (Kroger, 2012, p. 41).
The network is also connected with their transportation system to eliminate “‘empty’ trucking miles and reduce freight expense” by coordinating with its suppliers and fleet operators (Kroger, 2012, p. 41). Kroger has a fleet of 2,700 tractors and 10,000 trailers that execute around 3,100 store deliveries per day (Kroger, 2012, p. 42). Thus, Kroger is allowed to effectively and efficiently deliver its products to its retail stores to be purchased by the consumer.
While it may seem rather complicated, the entire process has a seamless integration into the overall business model that has proven to be more successful than any other grocery store chain. Kroger has implemented a strategy that places emphasis on its products. The flows of these products serve as a pioneer of sorts in its industry. As Kroger continues to expand its operations, analysis will determine if the cu…………………………………………

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