Supply Chain Analysis & Resilience Strategy for a National Retail Group in Saudi Arabia

A national Saudi retail group operating a large network of stores and a growing e-commerce channel across multiple consumer categories, supported by a complex import-led supply chain and a network of distribution centres. Facing service disruptions, high inventory costs, and exposure to global supply volatility, the group engaged Saudi Strategy Advisory to analyse its end-to-end supply chain and design a resilience and efficiency strategy.

• Import Dependency & Supply Volatility: The group's heavy reliance on imported goods exposed it to global freight volatility, lead-time variability, and geopolitical disruption, periodically causing stock-outs and lost sales that the group could not consistently prevent.
• High Inventory, Low Availability: The group simultaneously carried high inventory and experienced frequent availability gaps, indicating poorly aligned inventory and replenishment policies that tied up working capital without delivering service.
• Distribution Network Inefficiency: The distribution-centre network and transport flows had grown organically and were not optimised for the group's current store and e-commerce footprint, creating excess cost and slow replenishment to certain regions.
• Omnichannel Fulfilment Strain: Rapid e-commerce growth was straining a supply chain designed for store replenishment, with no clear fulfilment model for online orders, undermining both cost efficiency and the customer experience.
• Limited Supply Chain Visibility: Fragmented systems and data prevented end-to-end visibility of inventory, orders, and supplier performance, limiting the group's ability to plan, respond to disruption, and manage suppliers effectively.

Saudi Strategy Advisory was engaged to deliver an end-to-end Supply Chain Analysis and Resilience Strategy — providing the group with a diagnostic of its supply chain performance and vulnerabilities, optimised inventory and network design, an omnichannel fulfilment model, and a resilience strategy to reduce cost, improve availability, and withstand disruption.

• End-to-End Supply Chain Diagnostic: Mapped and analysed the group's supply chain from sourcing through distribution to store and online fulfilment, quantifying cost, service, inventory, and lead-time performance and identifying the principal inefficiencies and vulnerabilities.
• Inventory & Replenishment Optimisation: Analysed demand patterns and segmented products by volume and variability to design differentiated inventory and replenishment policies that reduced working capital while improving on-shelf and online availability.
• Distribution Network Modelling: Modelled the distribution-centre network and transport flows against the current and projected store and e-commerce footprint, identifying the optimal network configuration to minimise total logistics cost and improve replenishment speed.
• Fulfilment Design: Designed an omnichannel fulfilment model defining how online orders would be sourced and delivered across distribution centres and stores, balancing cost efficiency with delivery speed and customer experience.
• Resilience & Sourcing Strategy: Assessed supply concentration and disruption risk and developed a resilience strategy combining supplier diversification, strategic safety stock for critical lines, near-shoring and local sourcing where viable, and improved end-to-end visibility.
  

• Segmented Inventory Policy: Recommended differentiated inventory and replenishment policies by product segment, holding leaner stock on stable high-volume lines and targeted safety stock on critical and volatile lines, simultaneously releasing working capital and improving availability.
• Network Reconfiguration: Recommended reconfiguring the distribution network around a smaller number of optimally located distribution centres with regional cross-dock points, reducing total logistics cost and improving replenishment speed to underserved regions.
• Distributed Omnichannel Fulfilment: Recommended a distributed fulfilment model using stores as forward fulfilment points for online orders in dense urban areas, lowering last-mile cost and delivery times while leveraging existing inventory.
• Supplier Diversification & Local Sourcing: Recommended diversifying critical-category suppliers and increasing local and regional sourcing where commercially viable, reducing exposure to global freight volatility and aligning with localisation objectives.

• Working Capital Release: Segmented inventory policies were projected to reduce inventory holdings by approximately SAR 220 million while improving availability, releasing working capital and lowering carrying costs.
• Logistics Cost Reduction: Network reconfiguration and transport optimisation were projected to reduce total distribution cost by an estimated 12%, improving the group's cost position in a competitive retail market.
• Availability Improvement: Improved replenishment and inventory policies materially reduced stock-out frequency on key lines, recovering lost sales and improving the in-store and online customer experience.
• Lower-Cost Omnichannel Fulfilment: The distributed fulfilment model reduced e-commerce last-mile cost and delivery times in major cities, improving online profitability and supporting continued channel growth.
• Greater Resilience: Supplier diversification, targeted safety stock, and improved visibility strengthened the group's ability to anticipate and absorb supply disruption, reducing the frequency and impact of availability shocks.