SC Operating Model
Project Info:
Modus Operandi Transformation
3PL Services Procurement in SC
Rationalize Cost
Client: Global FMCG company
Challenge:
Business was operating with an in-house supply chain model (2 central warehouses and 80+ unit distribution fleet). Along with scalable expansion of the business size and coverage, inherited model was struggling and creating a bottlenecks for enabling further growth potential.
Infrastructure and fleet capacities, along with available technologies and capabilities, necessitated a fundamental rethink and transformation of the current operating model and ownership structure (covering product categories with 2 temperature modes).
Solution:
-In-depth supply chain operating model cost and service level study was conducted (including ‘as is’ model as well as future growth and compliance related of capital investment needs);
Foreign and local 3PL partners have been invited for RFPs;
Holistic ‘buy vs make’ analyses developed and optimal balance of new operating model (ownership) defined;
New 3PL operators have been selected and contracted;
In-house capabilities for technologies (digitalization) have been deployed to better control cost and service;
Non-core assets have been either outsourced or sold out (over 100 mobile units).
Consolidated 2 warehouse locations into 1 central location reliably serving 20+K customers;
Result:
- P&L impact (cost avoidance): $600 K annually;
- Logistics related waste elimination (complexity);
- Service level improvement by 10 pp;
- The majority of logistics costs have been variabilized;
- Double-digit growth enabled and delivered over strategic planning horizon;