Optimize the Chain — SaharaFresh's Service Collapse

A four-round, advanced Operations & Supply-Chain simulation set inside SaharaFresh Distribution Ltd., a Lagos-headquartered third-party FMCG distributor (1,400 SKUs, 22,000 outlets across Lagos, Ibadan, Abuja and Port Harcourt, ₦96bn revenue on a thin 4.5% EBIT margin of ₦4.32bn). SaharaFresh grew by bolting on three regional distributors and never integrated their four distribution centres — so it inherited overlapping catchments, four incompatible inventory rules of thumb and a transport cost-per-case 35% above benchmark. On 14 July 2026 its two largest principals, NorthStar Foods and AquaClean (together 41% of revenue, ₦39.4bn), issue a joint service warning: on-time-in-full (OTIF) has fallen to 78% against a 95% contractual target, and a clause lets them appoint a parallel distributor if OTIF stays below 90% for two consecutive quarters — one quarter is already lost. Fill rate is 88% (target 97%), inventory turns 8.3x (target 12x), total logistics cost 11.8% of revenue versus an 8.5% benchmark (a ₦3.2bn excess larger than the entire EBIT), and emergency inter-DC transfers have tripled to ₦480m/quarter of pure waste. Playing the Head of Operations, you (1) DIAGNOSE the network — split logistics cost into warehousing, primary and secondary transport, find the lanes and SKU class driving the OTIF miss, and rank network vs inventory vs transport by impact before spending a naira; (2) REDESIGN the distribution network — keep four DCs and re-cut catchments, consolidate to three (−₦900m fixed / +₦620m transport), or add a fifth cross-dock (+₦1.1bn fixed, +9 OTIF points in the weak region) — optimising TOTAL landed cost, not one component; (3) SET INVENTORY POLICY by ABC class — choose continuous vs periodic review and a cycle service level per class, holding more safety stock on volatile A-items and slashing it on long-tail C-items to hit 97% fill AND 12x turns simultaneously (a blanket 99% CSL blows the turns target); and (4) SELECT THE 3PL & COMMIT — keep the in-house fleet (₦1.4bn capex), outsource secondary distribution to a national 3PL (+12% per case but a contractual 96% OTIF and ₦1.4bn capex avoided), or run a hybrid, then negotiate an SLA (penalty per OTIF point, volume commitment, 90-day review) and pitch the recovery to the principals. The math rewards measure-before-invest, total-cost-to-serve thinking, segmented inventory, an SLA that transfers risk, and quick wins under the 30-day/one-quarter deadline — and punishes the five classic errors: spending capex before raising the 61% truck fill, blanket 99% service that destroys turns, silo-optimising one cost while net-worsening the whole, picking a 3PL on rate without reading the SLA, and ignoring the un-integrated legacy footprint. Final KPIs track OTIF (%), Inventory Turns (x), Total Logistics Cost (% of revenue) and EBIT impact (₦bn).