The Project: "To review the current outsourced supply chain to customers in mainland Europe and assess cost effectiveness. To identify alternative logistics service providers, issue a request for quotations and identify a suitable supplier."

Background

Hexel International are a specialist packaging company who work for leading supermarket groups providing a specialist packaging operation . This involves receiving a number of products which are packaged together for special marketing offers.

The company has an impressive growth rate and is forecasting an increase of 200% over the next two years. The current logistics service provider was struggling to cope with current growth levels.

Activities

We reviewed the current operation based in Bremen and identified suitable strategic options. These options included identifying a logistics service provider.

• Close to the point of delivery (mainly Cologne and Weilerswist)
• Close to lowest cost storage option (Venlo)
• Lowest price option using multi-location company
• Potential suppliers were identified, requests for quotations issued and results analysed. Detailed report and recommendations issued.

Outputs

• Existing supplier eliminated in terms of both service levels and cost
• Options 2 and 3 eliminated on grounds of either cost or service response times
• Option 1 was considered to provide the required service levels and the ability to cope with the forecast growth whilst providing a cost effective service.
• Two companies were identified as meeting the criteria.

Results

The new operation was set up near Cologne and provided the required service levels at a cost effective rate.

The change of contractor was made at an early stage to allow a relationship to develop between the new contractor and both our client and his customers before peak activities commenced.