The Company is a premium furniture and accessories retailer using showrooms, a catalogue and the web to reach their customers. All products are sourced overseas with the majority from China and India. The Company is growing very fast and it has outgrown the warehousing arrangements that can be effective in a smaller company. The supply chain is showing signs of considerable stress The question of outsourcing is to be addressed

Activities

• The as-is supply chain was mapped in detail
• The associated costs with each leg of the process was compared to our database.
• Stock models were built to give guidance on the level of overseas and UK storage
• A model of the warehousing needs over the next 10 years was built to allow the costs and investment returns of each stage of the company growth curve to be calculated. A pro-forma plan of the likely warehouse layout was designed so that as growth materialised additional warehouse space could be taken
• Training visits to larger warehouses were arranged
• The IT requirements functionality required was defined

Outputs

A detailed analysis of the alternatives covering:-

• Current supply chain map and costs
• Investment required for the recommended route and one alternative
• Savings to be realised over current arrangements
• Site searches
• Implementation plan

The Result

• A strategy that focussed the manufacturing and supply chain organisations along market lines
• An 8% reduction in the capital required to service the market
• A 25% reduction in distribution costs, both internal and to customers
• A 20% increase in customer service (with other measures)
• Enabled a reduction in stock-holding
• A route to make further savings