Driving supply chain progress in the manufacturing & retail industry – MHD editorial
A product’s journey from source to retailer shelf is increasingly vulnerable to economic headwinds and ongoing supply chain volatility. This is especially true in today’s environment, and the manufacturing and retail industry in Australia must become bolder in how it redesigns its supply chains.
Extolla, a supply chain consulting and solutions provider, has seen first-hand how a focused, agile strategy can unlock measurable operational and financial value. One standout project that exemplifies this was a collaboration with Lion, a leading beverage manufacturer, to overhaul how their products were distributed to a major liquor retail network.
The Challenge: An Outdated Model
The retailer’s traditional Direct-to-Store delivery model created inefficiencies at nearly every step. Delivery frequency was high, store staff were burdened with stock management, and visibility across the network was limited. These issues became even more apparent when demand spiked or omnichannel service requirements came into play.
Lion recognised the need to simplify operations, reduce Cost-to-Serve, and improve the reliability and transparency of its supply chain- while also supporting the retailer’s goals for a better in-store and online customer experience.
The Shift: Regional Supply Distribution
Working closely with Lion and the retailer, Extolla led the shift from Direct Store Delivery (DSD) to a Regional Supply Distribution (RSD) model. This meant integrating Lion’s inventory into the retailer’s distribution centre (DC) network and redesigning roles across logistics partners, commercial teams, and operations.
At the core of this transition was Extolla’s “Value Creation” commercial construct – a shared-cost model that incentivised collaboration. The result was a more scalable, resilient, and synchronised supply chain.
Key Enablers: Collaboration and Technology
Cross-functional collaboration was critical. Extolla served as the independent programme lead, connecting Lion’s logistics, planning, and replenishment functions with the retailer’s DC and store operations. The focus was to keep all parties aligned to outcomes, make decisions efficiently, and manage risks proactively.
Technology also played a key role. Supporting the implementation of an Electronic Data Interchange (EDI) system, gave all stakeholders real-time data visibility. This supported accurate forecasting, streamlined processing, and accountability across the supply chain.
Tangible Results
The benefits were realised immediately:
• Inventory control improved, with better expiry management and SKU availability.
• Cost-to-Serve decreased, with shared savings delivered upfront via the Value Creation model.
• Delivery accuracy and service improved, supporting both online and in-store availability.
• Carbon emissions were reduced, due to fewer truck rolls and optimised routes.
The national rollout was completed in just 11 weeks – including planning, inventory build, stakeholder alignment, and go-live. This speed, and the successful results, were made possible by trust, accountability, and joint ownership from all stakeholders.
Lessons for the Manufacturing and Retail Sector
This collaboration highlights what’s possible when suppliers and retailers move beyond transactional relationships. As sustainability and cost pressures mount, those who co-invest and co-create smarter operating models will gain the competitive edge.
“By combining deep industry knowledge with hands-on implementation and operational support, we continue to help businesses unlock measurable value across their networks,” says David Harrison, Chief Commercial Officer at Extolla.
“Whether it’s through cost reduction, operational efficiency, or improved sustainability, the opportunity for supply chain evolution in the manufacturing sector has never been clearer.”