Background
A
multinational manufacturer and distributor of safety equipment
had outsourced its UK activities to a third party logistics
company. Their concern was that UK distribution costs
were significantly higher than in any other country. Bisham
Consulting were asked to benchmark the activities with
those of similar companies and to review the outsourced
operation.
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Activities
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Benchmarking confirmed that distribution costs were
excessive. Bisham prepared an Invitation to Tender,
identified suitable third party logistics companies
and issued the Invitation to Tender. The tender responses
were analysed using agreed assessment criteria and a
new contractor was selected. We were responsible for
project managing the implementation.
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Outputs
·Kidde
was now able to map and evaluate its own supply chain
. A better understanding of the market and players was
established
. A full activity cost model was developed
. The exercise enabled Kidde to re-assess the reasons
. for outsourcing and the objectives envisaged
. A set of Key Performance Indicators was agreed
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Results
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. New contract with a new
third party logistics supplier was established
. A reduction in distribution costs in excess of 15%
was achieved whilst maintaining current service levels
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