Supply Chain Design Consultancy that Delivers

Delivering excellence in Supply Chain Design Consulting to a National foods manufacturer and distributor.

The challenge

Our client for this project was a national bulk chemicals processor and distributor. From a base in the northwest of England this company ran a fleet of over 40 articulated and rigid tanker vehicles collecting bulk liquid‘s for processing as well as delivering finished chemical loads to customers. Over a period of time this client had found that there transport costs and controls had drifted and that as a proportion of revenue these costs had grown to almost double what they had been a few years previous.

In addition to this, the client had also found following regulatory VOSA inspection that it was not fully compliant with all the requirements of its O licence and as a result needed to put in place significant controls and organisational structures to deliver change quickly. If they did not make the necessary changes, the business would lose its operators licence and would therefore not be able to operate.

Approach

Our team had a sizeable task to transform the supply chain of this organisation. Our approach was to build a very clear and well validated set of operational principles and current performance metrics for the organisation. This process was lengthy but essential to ensure that subsequent business decision making could be thoroughly substantiated and relied upon when making transition across the supply chain.

Our approach then moved into analysing the range of potential options for each stage of the organisation’s supply chain from farm through to final mile delivery. Individual options also had to be overlaid onto a supply chain wide analysis to understand the impact of various solution choices onto other aspects of the organisation’s operations.

The project followed structured approach leading to a point where supply chain wide and location specific recommendations could be evaluated and actioned with confidence.

Actions

Our team had to conduct a very broad array of activities. Under the guidance of the project director several project work streams were established:

Data & Analysis

the work stream covering data and analysis had to build a very clear and auditable set of business data that spanned the operations and outputs of dozens of client locations. Part team had to deal with inconsistencies in data capture and processing across the range of activities and build a large scale data repository covering all aspects of the supply chain. This team also had to understand and demonstrate the costs of every aspect of the solution and ensure that this was relevant and accurate to enable valid comparison to future solutions.

Transport optimisation

the transport work stream had to understand and evaluate every leg of the transport journey types that were present within the network. This ranged from rigid and articulated vehicle raw material tanker supply, through to intersite tank and bulk product movements, intersite movements of ambient processed product, final mile delivery to a mix of retailer and wholesaler distribution centres and significant direct to store daily deliveries.

Armed with a thorough understanding of the operational processes and procedures in place, as well as the organisational structures overlaid onto this solution, the transport optimization team used leading transport optimisation software to evaluate opportunities to streamline various elements of the clients supply chain

Manufacturing & processing evaluation

the manufacturing workstream have to identify comparable costs of operating at each of the manufacturing plants in the network. This was not simply a case of taking unit cost production and applying averages across the board; the team needed to understand the impact on unit cost of increases and decreases in volume, taking into account the impact of fixed costs such as space, semi fixed overheads such as management and administration and fully variable costs such as operative labour.

Regional & local hub network strategy

this work stream looked at the overall layout of the secondary distribution model for the business. This network was significant, running to over 100 depot’s across the country. The network strategy team had to build a strong understanding of the inter relationships between the primary manufacturing facilities and the local distribution points including the relationship between single site produced specialist products and their distribution to final mile locations. Using supply chain analysis tools our team evaluated a range of alternative service criteria to optimise the relationships between regional hubs and the manufacturing point as well as evaluation of revised operating locations where that was practical to achieve.

Overall review & reporting

On a project of this scale the project director led a single unified reporting workstream back to the customers executive committee. This provided regular feedback and information 2 the customers leadership team, and this proved highly beneficial particularly when challenging or perhaps thought provoking findings well-being made by the work stream teams. At several points through the project the team were able to identify operating factors, considerations and methods present within the supply chain that the client’s leadership team had not been aware of.

The Results

This process was truly transformational for the client. I highly modified network supply chain design was recommended and implemented. This supply chain created significantly greater scope to meet changing consumer behaviours and created a very clear path to a future operating model that enabled the business to maintain its presence in its core market sectors as well as develop efficiency in servicing bulk and large scale retail customers with greater service resilience and predictability of cost.

In addition to the overall supply chain evaluation, it became apparent that there was a standout manufacturing plant that was significantly less efficient than other sites in the network, and was actually costing the business money to operate.

The consultancy team supported a process to exit this site and assisted with all aspects of preparation for external communication and internal knowledge development about the rationale for the decision and it‘s logic.
Overall this process provided significant clarity and direction for the leadership team for the client. The team were able to progress change effectively and had a very clear understanding of the required organisation structures and people needed to move forward and deliver the change.