Background & Brief
The company had grown rapidly and operated two supply chains, with retail and etail outsourced to different specialist providers. The challenge was to identify an optimised logistics set up and minimise the total associated costs.
SCALA modelled both inbound and outbound product flow and evaluated the costs of all viable options in order to answer the following key questions:
- Should the company continue with two supply chains or move to a combined solution
- Are there benefits by decreasing/increasing supplier direct deliveries
- Should the company operate or manage any “in-house” logistics activities
- Are there suitable contract logistics companies able to deliver the required solution
The solution also had to be able to handle the demand patterns of a specialist gift retailer where 80% of the annual volume is handled in the six weeks leading up to Christmas.
A single supply chain and logistics solution was developed by SCALA in order to allow an enhanced fulfilment process. SCALA made a positive recommendation that an external provider would be the preferred solution owing to the costs associated with operating a logistics network with extremely volatile levels of demand.
Once the final decision had been agreed with the client, SCALA then operated a tender process to identify the best logistics partner from the shortlist drawn up in phase 1 of the project.
Benefits & Results
SCALA set out the development options, quantified the alternatives and established and recommended the preferred contractors before managing the tender process to deliver the solution at the lowest possible cost. The results were:
- Single logistics provider chosen to enable an integrated supply chain strategy
- Peak capacity increased by 25% owing to the use of a more flexible warehouse solution
- Availability enhanced by 10% thanks to the benefit of a single stockholding
- Fulfilment of internet orders increased to +99% thanks to more accurate stock control
The project delivered a flexible solution that fitted a growing business and identified an appropriate 3PL with capacity available at the correct time