SCALA | Strategic Network Evaluation

With a successful market leading brand, this building products supplier wished to improve service to their key customers and thereby increase sales volumes and customer retention. At the same time their current warehouse appeared to have reached the capacity limits.

SCALA undertook a detailed examination of the total supply chain from factory to DC and then to customer. This involves handling methods and characteristics, stock volumes, product diversity, order volumes and frequency, transport methods and organisation. Data analysis was undertaken of sales at an individual SKU and at individual customer order level.

SCALA devised three alternative potential strategies. These were modelled with current and future cost comparisons projections.

The review provided quantitative and qualitative assessments of the alternative strategies for achieving the business goals of:

- Enabled improved customer service with direct delivery to individual customer locations
of consolidated products from a number of different manufacturing points
- Significantly reduced stock in the total supply chain
- Improved 'on-shelf' availability to consumers and end users

Our recommendations included:

- Identified short term methods of enhancing current DC capacities
- Identified contract rating structure changes to reduce delivery costs
- Identified optimum DC location and size minimising overall logistics costs
with 'cross docking' and outbase hubs

SCALA are continuing to work with the client to identify other parts of the group that could enable additional synergy benefits.