Our client is a leading toy manufacturer with sales of €1 billion, with clients in 25 countries, offering a diverse portfolio comprising approximately 10,000 SKUs. The majority of their products are manufactured in factories located in Asia and are distributed through a network of 4 ports in the EU and 5 distribution centers.
Business Challenge
Delays were encountered in a project aimed at centralizing distribution operations in Eastern Europe, which necessitated the extension of existing third-party logistics (3PL) contracts. The project's aggressive growth agenda was misaligned with the challenges of long lead times, high inventory levels, low margins, and elevated operational risks. An analysis was conducted on the configuration of assets, flows, and policies to recommend the most suitable setup. This analysis took into account the impacts of centralized operations on existing 3PLs as well as potential new ones. Additionally, the expected expansion in e-commerce was considered alongside the continued attention to brick-and-mortar sales.
Approach
- Delivered an initial Centre of Gravity study
- Completed Assessment of Business Needs and Supply Network Requirements
- Business Needs translated into Supply Network Requirements
- As-is model (Baseline) built and validated
- Improved base case developed, and quick wins identified
- Extended case developed to reflect long term growth
- Evaluated 11 main scenarios and additional what-if and sensitivity analysis to identify the optimum global 10-years Supply Chain footprint
Results
- Designed a decentralization strategy which will lead to €11.4 million in savings
- Achieved improved service reliability with shorter lead times.
- Delivered expected business needs, including optimizing channels and customer mix for e-commerce
- Revised 3PL strategy, implementing actionable contracts, SLAs, and fostering collaborative and strategic relationships