The client’s problem
The client, a leading European design company, had experienced steep growth in sales over a few years and had not aligned its organisation and processes to match this. Consequently, this had led to a decrease in performance caused by rising costs from the supply chain, inventory and warehouse operations including losses from missing quantities, too much capital held up in inventories, lower flexibility and low efficiency in in/outbound logistics. Thus, the client needed help to conduct a thorough supply chain assessment to address key issues and identify a selected set of improvement levers to match growing sales.
The approach was first to understand the client’s supply chain including the current performance of warehouse operations, organisation of in/outbound logistic setup and efficiency enablers. This was done by gathering documentation on people, technology, systems, workflows and assessing value leakage. A key insight during this phase was that the client’s supply chain processes were highly inefficient and broken causing significant losses on the bottom line, e.g., high amount of delivery errors, inquorate stock levels in the IT system, lack of product documentation, shipments not consistently tracked, inefficient organisation of warehouse, and lack of a sufficient warehousing system. In the second phase, a prioritised set of improvement levers were identified including design of supply chain performance management and optimisation of the supply chain organisation, definition of responsibilities inside and outside the supply chain, selection and recommendation on supply chain IT systems. In phase three, a thorough implementation plan was crafted including shaping of detailed implementation initiatives.
Increase in logistics delivery performance, reduction in losses from missing quantities, 30-50% decrease in capital held up by inventories, and sufficient flexibility to scale warehouse operations and logistics to meet future growth in sales.