The Project:
To conduct a detailed health check on the current outsourced warehousing and transport services in Germany. This involved benchmarking with other companies, comparing current costs and services with other service providers and finally comparing outsourced cost and service levels with in house option.
Background
Weight Watchers supply both educational materials and foodstuffs to the German market through a number of self employed group leaders. The logistics operation is outsourced.
The company decided to carry out a health check on the operation including benchmarking costs and service levels in general. The second stage was to obtain quotations from other service providers to provide a direct comparison with their own service provider.
A number of Weight Watcher companies in Europe operate in-house and Germany required a comparison with an in-house option.
Activities
Identify current costs and service levels. Benchmark with similar operations in similar industries. Issue a request for quotations to selected service providers and compare costs and service levels with the existing service provider.
Design a theoretical in-house operation including premises, staffing, equipment and transport operations. Prepare in-house budget and compare with current operation.
Examine the benefits of using the German based operation to service other nominated countries and examine the impact on cost and service levels.
Outputs
·
Verification that the current outsourced operation was both efficient and cost effective.
· Confirmation that by taking the operation in – house costs would be increased and it would be difficult to maintain service levels during periods of peak activity.
· Confirmation that costs benefits would result from including other smaller country operations within the German DC
Results
·
New contract with existing third party logistics supplier.
· Elimination of plans and proposals to take back the operations in-house.
· Detailed discussions to take place regarding the potential to move other countries to the German Distribution Centre
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