Background & Brief
A major manufacturer of fresh bakery products was looking for assistance after failing to realise the anticipated benefits of more than £1m per annum after outsourcing its warehousing function. The manufacturer had previously operated its own warehousing while using a third party for transport, but decided to tender for the entire business in order to make space at its manufacturing sites for additional production. SCALA was asked to investigate why the savings hadn’t been realised and suggest efficiency solutions to cut costs.
SCALA handled the project in two phases, with phase 1 involving a detailed study of the current operation and an assessment of current operational methodologies. A benchmarking exercise was also conducted and the client’s strategic options were evaluated and quantified.
Phase 2 saw SCALA look in greater detail at the following areas: Pallets Ordered versus Pallets Delivered; Case Picking; Waste Management; Factory Collections; and KPI Reporting Suite.
Benefits & Results
The project identified significant savings and provided a roadmap for development alongside more effective management processes.
- Stage 1 identified £295,000 p.a. of easily achieved savings
- Stage 2 delivered a further £180,000 p.a. of savings
- Cases per pallet were increased by 11%
- Trunked cost per pallet was cut by 20%
- New KPI reporting suite instituted
The project enabled the client to make the operational changes required to deliver the anticipated savings from outsourcing their logistics function.