Client situation & approach
The client was a leading global tobacco manufacturer based in Turkey and losing in GBP10m p.a. due to a lack of critical mass which was driving a high cost to serve. The issues to overcome were:
- Small deliveries driven by traditional nature of Turkish supply chain
- Cash only with high frequency to be first to obtain the outlet’s available cash
- Every supplier delivered its own products separately with exclusive distributors
- Client distributors delivered 3% of the tobacco on its own
EFESO supported by:
- Carrying out an As-Is assessment including visiting distributors and outlets in both urban and rural areas
- Modelling of the cost to serve
- Identifying and assessing the tactical and strategic operational improvements needed to improve the situation
- Developing alongside the client team a business case and implementation plan
Results
- Gained the understanding and commitment of local management to the radical changes needed in their route to market
- On-going implementation of the plan to achieve the benefits of GBP 9m, as committed to by local management, by:
- Setting-up a shared distribution platform with a portfolio of complementary products
- Rationalizing the distributor network, improving controls and optimising delivery frequency.