How Sysco Modernized Warehouse Operations to Drive Increased Efficiency

As CPG companies look to meet the increasingly complex demands of their consumers, supply chain operations often require a revamp. By embracing advanced technologies and agile, cloud-based processes, leaders can better adapt to market shifts and consumer needs, transforming their supply chains to drive efficiency, enhance visibility, and ensure responsive, streamlined operations.In this webinar transcript, explore how global food service company Sysco approached its own supply chain modernization. Samir Patel, senior director of software engineering, shares how Sysco’s network of over 110 warehouses faced increasing operational demands, and its legacy infrastructure became a bottleneck, hindering efficiency and scalability. In response, Sysco set out to migrate to a cloud-agnostic, multi-tenant warehouse management system (WMS) designed to future-proof their operations.Lisa Johnston: Hi everyone, and welcome to “Inside Sysco’s Transformation to an Agile and Connected Supply Chain.” I'm Lisa Johnson — the editor-in-chief of Consumer Goods Technology. I'm excited to welcome you here today. Sysco is one of the leading food service providers, and their warehouse management system plays a crucial role in optimizing their supply chain operations. This includes managing the flow of products and ensuring efficient inventory management across their warehouses, of which they have over 110. So as customer demand and business complexity have grown, their legacy infrastructure has been struggling to keep pace. This of course led to inefficiencies and operational challenges.Today, we're going to learn from Samir Patel, senior director of software engineering at Sysco, about how they transform their warehouse management system to create an agile and connected environment. And in doing so, they've improved decision-making across all operations. We're going to start out with just a few words from Justin Honaman, head of worldwide retail and consumer goods industry strategy and BD at AWS, one of Sysco's strategic partners in the journey. He's going to set the stage with a little background info, and after that Justin and Samir are going to talk through some of today's supply chain trends impacting Sysco: how they're adapting and how they're using their new WMS for competitive edge. So with that, Justin, I'm going to hand things off to you.Justin Honaman: Thanks, Lisa, I appreciate it. Great to see all of you, and thanks for taking the time to be here with us today. We love doing these types of sessions. We really appreciate the relationship with consumer goods technology. Many of you watching have been involved with CGT for many years, and if you're new to CGT, welcome. I can tell you the community is incredible on both the business side and the CGT IT side. But hey, we're here to talk about Sysco and its transformation. We're going to get there in just a few moments.For those who may not be familiar with Amazon, I thought I'd give you a quick snapshot of what we do in the industry here at AWS, and then we'll jump into Sysco. So first of all, Amazon's mission is the Earth's most customer-centric company. And when you think about retail and consumer goods, they actually sit together at AWS under one industry vertical. And so within that sits food service and traditional retail as well as consumer goods manufacturers upstream.Some of the big focus areas for us relate to a couple of core pillars. Within consumer goods, it’s around launching brands that consumers love, and around innovation. Of course, also supply chain, which is a topic for today. And on the retail side, things like composable commerce and really leveraging the retail history that is not only AWS, but broader Amazon and bringing some of the operational benefits.Now within food service and the distributor side of things, you think about Sysco and how they sit in food and beverage, but also a little bit between the manufacturer and the retailer or QSR or school. Or think about other outlets that Sysco delivers to. And you'll hear that from Samir in just a few moments. Within this space, for us, it's a pretty significant part of our worldwide business. And you can see these are some of the big areas that are interesting to our customers in this space. And the area we're really going to focus on today is around supply chain and execution as well as some of the other elements that come into play when we get to that conversation.So with that, let me introduce Samir from Sysco and we'll jump into the conversation. Samir, welcome. Thanks so much for being here, and why don't I just hand it to you to introduce yourself?Samir Patel: Thank you Lisa and Justin for the warm welcome. Really excited about our conversation today. Let me start with a quick introduction. I have been in the software industry for over 25 years. I have progressive experience architecting, developing, and modernizing custom solutions using emerging technology, which also includes inclusive collaboration and cultivating engineering culture. I've been with Sysco for over 13 years now. Really fortunate to work with talented colleagues and inspiring leaders.My role has evolved over time. I started Sysco as an architect and now I'm an engineering leader focusing on supply chain and merchandising engineering. So that's something that I'm really passionate about. In this role, I have about four years focusing on supply chain and merchandising. Our goal is very simple. It is about building the common engineering culture and practices and delivering incremental value to our business as well as the technology outcome faster.A large part of my team is in Sri Lanka, and we have a core team in the U.S. focusing on three primary functions: software engineering, SRE cloud engineering, and then data engineering. Plus the way my team is organized is vertically and horizontally. So vertically, the team is organized by functional area across the supply chain and merch. And then horizontally I have functions that are more about common things around SRE, cloud engineering, things like that. Also, we do a lot of collaboration with product teams, cross-functional teams within Sysco. Honaman: Perfect. I love that, Samir. Give our audience a bit of perspective. Not everybody listening knows food service or even knows Sysco. They might've seen your trucks operating in their neighborhood or city. But talk a little bit about Sysco and where you guys focus.Patel: So I want to start with the purpose: connecting the world to share food and care for one another. And our purpose is intended to answer the question, “Why do we exist?” A little bit more about Sysco. We are the world's largest global foodservice leader. We operate in 90 different countries. We play a pivotal role in supplying food and non-food products to a diverse range of customers. We have about 76,000 colleagues. Our company operates 340 distribution facilities worldwide, and we are serving about 730,000 customer locations.So that's the key services that Sysco offers regarding the food products, which are starting from fresh produce and meat to seafood, frozen food, and specialty items. And we have a diverse range of customers that we are providing everything to in order to create delicious and satisfying meals. Beyond food, Sysco also has essential non-food items such as janitorial supplies, paper products, equipment, packing materials. And beyond that, also we include products: equipment and supplies for food service and hospitality industries. Also, we have tailored solutions beyond food distribution to meet specific requirements for our customers. For example, menu development, inventory management.Our customer base is also as diverse as our product offerings. Sysco is basically distributing food products that prepare a meal away from home. Also, we have a wide range of customers including restaurants, hotels, resorts, healthcare facilities, education institutes, and corporate cafeterias. Our company's ability to serve a wide range of customers is a testament to its versatility and adaptability. So that's kind of briefly what Sysco is doing and there's more information at Sysco.com.Honaman: Wow. I know the industry from my time all the way back to when I was at Coca-Cola, and of course, I always think of food and beverage, but I don't think I ever realized the broader set of products you all carry. That's why I love doing these. You always learn something. I highlighted earlier some of the big trends that we've seen with our customers in the industry. Tell us what's going on with you all in supply chain. And when we say supply chain at Sysco, what does that mean?Patel: So at heart, Sysco is a supply chain company. Our customers are basically coming through Sysco Shop, which is our digital platform, and B2B channels. That's where they have the digital experience and the ease of ordering. That's the value-added service for our customers. But at large, if you look at Sysco in the U.S. itself, we have about 14,000 delivery vehicles. That includes about 120 EVs globally. For today's focus, we are going to talk about our warehouse management area. We have about 110 warehouse locations across five countries. And then we serve different business units through our network, which is broad lines, specialty, like fresh point meat companies, central warehouses. We have regional distributed mission centers and we also have international. About 15,000 warehouse colleagues are using the warehouse management system and doing this. We are moving millions of cases per day.Honaman: And you talk about your warehouse network and whatnot. I think you said 110. A big part of that, of course, is managing what's in them: what should be in what part of your network. Of course, this would be supported by what's called a WMS or warehouse management system. But talk about where you guys were, and I know we're diving down into some of the details here, but where were you, what was the problem you had to solve, and what were you looking to do?Patel: So we have our warehouse management system that we call Sysco Warehouse Management System or SWMS. It's a purpose-built, home-built custom application or solution. We have built it over the last 20 or 25 years and it is crucial to gain efficiency in how our business is working. It's been working great for us. But then our mission is also operational efficiency. So everything that we do in our warehouse, which is managing tracking, orchestrating product and people workflows, labor planning, scheduling — there are a lot of functions within the warehouse that this system is helping us with.Some of the challenges are about leveling up complexity pack and painting the picture. It has 1.5 million lines of code. We have a thousand-plus API endpoints. It's a single-tenant application that we had. It's a single-core base, but we do multiple deployments per site, and it was running in a traditional data center. It has all the integration with different functional systems, ERP systems. We had accumulated technical data or legacy products over the period of time. So there are things like SNA, integration, Windows C, Oracle forms, Pro-C — you name it. This created challenges for us where version upgrades for the operating system or database or application server were difficult.We had a lack of automation so deploying new features and new patches was slower. There were monitoring gaps. Also difficult to kind of remediate some of the vulnerabilities. Those are some of the challenges we faced, and that's where we kind of started looking into our modernization some years ago. So we call it SWMS Modernization Strategy. It's a multi-year, multi-state journey to decouple our reliance on legacy technologies and use a fully modern architecture.Our North Star reason is going to cloud-agnostic, multi-tenant SWMS. So the cloud migration was an integral part of that to stay focused on the modernization, and at the same time deliver incremental value to our business. I'm happy to say that as of two months ago, which is August, we have completed our cloud migration of 110 sites. This was really an outstanding work. We made history; this was one of the most ambitious cloud migrations that I have witnessed at Sysco. Just to kind of quantify, it took one year to migrate 108 sites, which was something we completed last year in September. And then there are two regional distribution sites. We took a little bit of time to do some more due diligence and deploy that, but within a year, we were able to migrate all the sites. So this was a really, really unparalleled achievement that we accomplished.A couple of things that I also want to highlight here — while doing cloud migration, we were also developing modernization for SWMS in parallel. So a few examples are like a new rugged experience on Android. We have handheld devices for clips in our warehouse, so we built the Android application as well as the new devices that we are rolling out. We also reimagined the desktop experience. There are browser-based users in our warehouse. Some of the integrations that now are developing are multi-tenant instead of single-tenant.Those are the things that we were able to achieve along with the cloud migration. And in the current state, our focus is to roll out those modern component solutions faster to the remaining sites. We want to have new sites created, go with the cloud, use the fully modern solutions, and then any new capability that we are developing is also using a modern stack. So there are a lot of things that we are doing above and beyond now with the cloud migration.Honaman: I love that. And for those of you listening that are technical, you love that last couple of minutes. For those on the business side, we're coming to you next. Samir, you made the move so quickly. You talked about some of the technology and the tech behind it that now provides the flexible kind of system of the future, which we will dive into in a few more minutes. But on the business side, so your customer internally, talk about who those people are and then how they benefit, and then also the end customer (the company that's ordering products from you guys).Patel: From the customer point of view, I'll give you a few examples. We have a new training program for when we have new associates joining Sysco. We want to train them for their site data and not in production. So with this cloud migration, what we were able to achieve is we have developed this in the cloud with a lower cost; it's 1/10 of the cost. We can park it, we can scale it, we can automatically present the infrastructure, and we can refresh the data very quickly. Those are the things we are able to achieve. If we had to go with the previous architecture, that was really, really time-consuming plus costly. So this was one of the things that we developed.Another thing that I want to highlight is also our ability to deliver new features. The bug fixes also were very fast. Just to kind of quantify, for about four sites, deployment was taking eight hours. Now with all the sites, we can deploy it in a day, eight hours. So about +2,500% again in terms of deployment speed. So that was amazing.And then we can enable the future of SWMS faster. Some of the rollout, the new capability I was talking about earlier, we can develop and roll out faster. We can scale infrastructure better. We have proactive monitoring, and then at the same time, we can optimize the cost of going to the cloud.Honaman: And then you talked about the pace of change and the pace of getting the work done and the ability to deliver very quickly. How? Why was it successful? Why were you able to move faster than most other businesses? What was it that you guys could do with 108, 110 warehouses in a year? How did that work?Patel: This was something like the whole cloud migration strategy, as I was saying. It was an integral part of our modernization. We did a lot of due diligence figuring out what's the right approach. Do we do lift and shift? Do we do lift and shift with migrating the database as is? Or do we go to Oracle RDS server versus PostgreSQL database, for example? How can we take some of the well-architected principles in the cloud? So thinking about resiliency, interior kind of thing. How do we improve security? How can we go about automation? So there are a lot of POCs we did. We did performance testing. We also thought about how we pay for the dual run cost, right? Part of the migration plan.Also, the rollout strategy was something that we thought through and said instead of a big bang, we want to do a pilot with some initial sites, focus more on the automation along the way, and then pick up the speed as we get success. So we started with one site per day and we picked up the speed up to eight sites per day. We kind of boosted our velocity. And one of the key highlights also is that we had zero rollback when we migrated 110 sites, and minimized the business impact along the way. And one last thing I also want to highlight is there was a lot of collaboration that we did. We had a leadership buy-in. We had business buy-in. We had an alignment with those people — everybody within Sysco. We had a good conversation about why we want to do it, how we want to do it. So those were really important things that we did.Honaman: I love that. In our prep calls for today, we actually had line of business leaders with us as we were talking through the capability and solution. Samir, talk about the business engagement. How important was it? What was their role in this versus the technology side?Patel: So I'll start with Rob who is my business partner on the IT side, and he works closely with the business in the field and operations. So Rob, myself, and some of the people on my team as we were planning this out, really engaged with the operations, figuring out how do we roll out. Rob is a senior director of warehouse technology, and he and his team really played a key role in driving the business engagement here. So all the deployment strategy we worked closely on, figuring out what we wanted to do, how to pilot which site we wanted to pilot. And then we had some of the users in the warehouses as pilot customers for us, so they were really helping us test it out and all that. This was really a very inclusive collaboration that Rob and the team helped with. So it was really great in that sense.Honaman: Got it. And then when you think about what's ahead — great accomplishment, I'm sure there was celebration and internal excitement to have this new capability and the cost savings and time efficiencies. When you look ahead six to 12 months, what is this going to enable? What do you see as the things you can build onto this?Patel: Yeah, I think some of the things that we want to now focus on as we are in the cloud is how do we do some of the remaining modernization faster? A couple of capabilities that I talked about — our rugged experience on Android — we want to roll out that faster. The desktop experience that we want to roll out to the remaining side. And then build more and more components with multi-tenant in nature. And from the business value point of view, we want to simplify work for our associates — like supercharged human decisions and automate as much as possible. And then there are business initiatives in terms of growth and optimization. We want to deliver on those promises as well.Honaman: Sure. Wow, that's great. Samir, as you think about crystallizing two or three big lessons learned, things that our audience here today could take away and go, "That was really valuable insight from Samir." What would be a couple of those things that were lessons learned from at least the effort?Patel: Absolutely. So I'll talk about a few. I'll say if there's a will, there’s a way. This was definitely teamwork. We had a core team with a can-do attitude. They were not afraid of challenges and we always found a way to wiggle through a lot of things that happened along the way. So definitely a close collaboration. We took this by heart; we really worked hard to get here. There are people that worked long hours and weekends to make this happen. So kudos to all the people who helped in this journey. Definitely we had a reason and then that goes with the execution and the key ingredient here is people and teamwork. We kind of try to put that in the center.Another thing is about automation. So I kind of talk about Selector Academy as an example. So not only infrastructure as a code, but we focused on creating pipelines to migrate database and data. We did CICD to deploy code. Also, we have achieved a multi-region, HADR capability in AWS, and also the testing part of it. A lot of those things kind of help us because we focus on automation. And not only that, it helped us save on cost.And then last but not least, we had a strategic partnership with AWS team. So Amit Singh, Mukesh, those are the few people that we work very closely with during the due diligence execution phase. Also, we were able to get map credit — those who don't know, there's a migration acceleration program that AWS offers that was really helpful to pay for the dual run cost. And even some of the things we saved going from Oracle enterprise edition to standard edition on RDS saved money there as well as we got a lot of automation done.And then it also helped the partnership with right-sizing the instances, tuning the performance, getting RIs, and reserving instances. So those are some of the lessons learned I would like to share.Honaman: No, I appreciate that. And for those of you listening that would like to explore further with Samir, reach out to one of us and we'll be happy to set that up. One thing I would add, just if I were to add one more, my observation is I like how your team thought about the customer experience first, and I refer to the internal customer, but then that enables a better experience to your end customer. But things like looking at how you were doing supply chain operations, how products are flowing, how inventory was being managed across 110, and then working back from that versus it being like an IT project where we just need to go replace a piece of technology without thinking of the customer first.Patel: Yep. Absolutely. I think you covered it very well. So we try not just to focus on the warehouse operation, but how do we kind of improve the experience for our end customer. Because if we can have a better workflow operation and optimization, that will help our end customer to get their delivery faster and without worrying about it.Honaman: Perfect. Love it. Okay, Lisa, I'm going to bring you in. I know you've been collecting a couple of other questions and I'll let you run through those if you have some. Johnston: Great. Yeah, thank you so much Samir and Justin. Great insights to share, great perspectives. I do have a couple of questions. Samir, I love learning about the breadth of Sysco's operations. Given the span of the regions and the markets you operate within. I'd love it if you could talk a little bit about how you balance the need for cost reduction with maintaining high-service levels for all of your customers. I think building on what Justin was just saying, talking about the customer experience.Patel: Yeah, absolutely. So Lisa, our pricing reflects value and I'll start there. We work with our suppliers to provide fair and appropriate pricing. And then we also, on top of that, have the largest, fastest, and the most local assortment of the product in the industry. The assortment will be procured at the industry-leading product cost, and also we have the Sysco brand that will lead the quality and value. So we do everything to optimize the cost, grow at the same time, and provide a fair price to our customers.Johnston: Justin, you obviously work with a wide variety of CPGs in the industry. How do some of the things Samir has been talking about and Sysco's experiences really dovetail with some of the other consumer goods organizations that you're working with? What are some of the things that are universal challenges?Honaman: Well I think this topic in general is one that affects food service as well as the largely consumer goods side of things. When you think about 110 different warehouse locations — I didn't even ask you Samir if they were all on different systems before, if they were all the same. But you think about some food service distributors, many consumer goods manufacturers that have grown through acquisition and those 110 warehouses weren't all part of a network plan for one company.And so the challenges of getting them onto a consistent operating system that's flexible, the challenges of getting good data and doing analytics insights. Now of course using AI to do things like forecasting or even inventory visibility because there are so many great use cases that come out of that. I think what's impressive here too is just the speed of being able to affect change and get to value quickly. I mean, a year for a hundred-plus locations is incredible — anybody in manufacturing knows that, or even in this industry.And then the last thing, I brought it up earlier, but having the business involved, we talked about that for years and still we see a lot of companies where the technology runs off and gets enamored with the tech and it's not thinking about the business or the customer. So I think those are some things that really stick out to me here.Johnston: Okay. Yeah, the speed's definitely impressive. Samir, I think you also mentioned out of the 110, you didn't have to roll back any of them, which seems incredible. So you had talked a little bit, Samir, about what you're focused on with the next, I think you said six to nine months. But would love it if you could just share any color on what's next for Sysco; anything exciting coming down the pipeline you can share with the CGT audience?Patel: Absolutely. So I'll kind of start reiterating our purpose, which is connecting the world to share food and care for one another. And I would like to also reflect on what we hold true and aspire to be. Our goal is to continue providing the base service to our customers in the industry and stay customer-obsessed. That's kind of the ground rule for us. We also have product availability that exceeds all competitors with the broadest assortments and deliver on time and when promised. So Sysco will continue doing that.We also provide our customers with technology solutions that are easy to use and inspire them to buy more from Sysco. And our tech tools will be a strong point of differentiation. And we have our sales consultants and delivery partners. They are based in the industry, and they know our customers very well. We want success for our customers; their success is our success. So those are some of the next steps I want to share.Johnston: Great. Some exciting days ahead for Sysco. Okay, so we are just about out of time. Justin, any final thoughts you can leave us with?Honaman: Yeah, I just want to thank you both. Thanks, Samir for doing this, quite frankly, and having the conversation with us. Thanks for the partnership. It's a lot of fun to work with a customer that likes to innovate and try things. Some things work, some don't, but then you can grow together. I really appreciate the partnership that we have with you and your team and the leadership at Sysco. And then on the Consumer Goods Technology side, I mean we've had a long-term relationship with CGT and I look forward to that continuing. And again, you guys create an environment for leaders to connect in our industry and it's unique and so really appreciate that.Johnston: Thank you, Justin. You stole my thunder with all the thanks, and you did it much better than I would've done it. So thank you so much, Samir, and just I want to thank you both for joining and sharing your insights with the CGT audience. We're feeling incredibly fortunate to share this kind of perspective. So thank you for your time today.Patel: Thank you, Lisa. Thank you, Justin. Really had a great time talking to you guys about our journey, and I hope other customers get inspiration from us and do the same for that customer. So really great to be here and really happy with the way we discussed this topic. So thank you for that.

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