European Logistics Strategy / Bonded Status

Global Electrical Product Manufacturer

Background & Brief

Mainland Europe customers are currently served from the Company’s own UK Warehouse. They have a growing European business predominantly in Germany but also across Southern and Eastern Europe. Uncertainty about Brexit is making a decision about EU warehousing particularly pressing. Also by having a European warehouse, customer service could be significantly enhanced (to next day delivery) and this may be essential to grow the European business further. Decisions need to be made regarding whether to proceed with an EU warehouse - location, duty efficiency and outsource v inhouse For Ireland the decision has already been taken to continue to supply from the UK warehouse. SCALA was asked to look at justification, challenges and geographical options for a European warehouse as well as the option of the UK warehouse becoming a bonded warehouse

Project Approach

  • SCALA considered three potential scenarios: 1) Continue as is, 2) Set up a warehouse in Northern Europe to supply continental European customers with stock supplied to the warehouse direct from the manufacturing base in China and India, 3) Set up a warehouse in Northern Europe to supply continental European customers with stock supplied from the UK Warehouse
  • Topics to consider:- Impact on service, cost, product handling and inventory, Implications from supply perspective ex China (potential of smaller runs and shipments), Fit for future check re growth and market changes
  • SCALA assessed the Benefits / Risks, Organisational impact/opportunities, 3PL v In-house, Optimal warehouse location and potential partners, Route, Challenges and benefits of achieving bonded status in the UK warehouse, and Timescales for implementation.
  • Benefits & Results

  • SCALA constructed a ‘Comparison Cost and Risk Matrix’ defining the impact of the three main options on lead-time, freight costs, delivery costs, admin costs, potential for delay, handling costs, inventory costs etc.
  • SCALA introduced the client to appropriate European 3PLs
  • SCALA reviewed the existing warehouse, carried out a gap analysis and reported on the benefits, challenges, obligations, required processes and timeframes to achieve bonded status
  • Final Outcome

    The client was presented with all the information necessary to make an informed decision about their European distribution and the status of the UK Warehouse
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