The Project:
To review the existing UK supply chain with a review to reducing costs, while ensuring no compromise in customer service.
Background
This Pan-European distributor of engineering spare parts was looking to reduce operating costs without impacting on customer service. The business carried over 150k SKUs in stock and bought in over 45% of its catalogue on a cross-dock basis. Its customer service proposition had to balance the costs of holding stock against a customer demand for time-critical spare parts. Urgent deliveries had to be made within 2 hours while the standard service was next day.
Activities
Bisham Consulting were requested to undertake a pan-European transport study to determine the optimum number of locations to meet the customer service requirement at least cost. The study combined the use of a DPS Logix planning and a service questionnaire to confirm customer service requirements and practice.
Outputs
·
Extensive modelling demonstrated that operating locations for stock could be cut by 50% and still achieve the customer service proposition.
· Through a series of workshops the sales staff were convinced that sales offices could become stockless.
· The team identified the locations for closure and costed the impact on the business.
Results
·
The customer service proposition was re-defined
· UK stock locations were reduced by 70%
· Cost savings of over £5m were identified and work is underway to deliver
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