Designing an optimal supply chain network moving raw material from supplier to delivery of the finished product to the end customer with minimum waste.
Current State: Customer Challenges
Distributing its food products through three different divisions had created a complex supply chain network for a food and beverage manufacturer.
As an organization committed to a culture centered on employee safety, continuous improvement and exceeding customers’ expectations, it was evident that they needed to optimize the network in order to exceed these goals. Faced with significant waste related to the movement of product and information, the customer recognized many areas for improvement within its supply chain. The waste led to multiple issues, including:
- Excess inventory
- Inaccurate data
- Lack of visibility
- Low flexibility, and
- People capacity issues
The customer lacked the bandwidth and capability to conduct a thorough analysis. As a result, they requested the expertise and teamwork of LeanCor’s supply chain consulting group to conduct a thorough supply chain analysis and provide optimal recommendations.
Future State: Analysis, Tools, Solutions
LeanCor's supply chain consulting team conducted a Current State network analysis including onsite visits and field visits to remote storage locations (regional distribution points), as well as:
- Created a TLC (Total Logistics Cost) template to understand total cost of fulfillment.
- Implemented quick wins through optimizing transportation network design from the warehouse in MN to regional distribution points, inventory rightsizing (min/max), ownership of inbound transportation, and back haul optimization.
- Conducted a Failure Mode Effect Analysis (FMEA), developed implementation Lean Readiness Checklist, created detailed timeline to implement future state, developed an organization structure, and provided a technology assessment/gap analysis.
- Developed a Future State multiple scenario analysis including; greenfield analysis, transportation network design, inventory optimization, lean warehouse implementation, etc.
The supply chain consulting team recommended new distribution and manufacturing center(s) location(s) in the supply chain network as well as the creation of a 1-3-5 year strategy development and cost summary for the Future State.
The supply chain consulting team provided a scale-able solution that was built to create a robust and visible supply chain. Ultimately, the project will allow the customer to achieve a reduction of total cost from a holistic point of view, improve service to its customers, and support its commitment to achieve future revenue and cost saving goals.
Results: Deliverables, Improvements, Customer Home-Runs
- Implementation of new transportation network design resulting in annual savings of $475K
- Estimated savings of $ 2.02M (7.17%) in total logistics costs (transportation, warehousing, inventory carrying costs, etc.)
- Estimated inventory reduction of $ 475K (8.12%)
- 8,673 miles (17.77%) saved each week to move material from mfg facility to distribution center(s)
- Increase in delivery coverage from 71% customers to 78% within two days for one network, and from 79% customers to 99% within two days for another network
Today’s complex supply chains require vision, strategies, and innovative techniques to create optimal performance. LeanCor Supply Chain Consulting is a trusted partner for implementing end to end supply chain performance. Global organizations leverage LeanCor Supply Chain Consulting to develop vision and strategy deployment plans for improvement in all supply chain functions. These include transportation and warehousing, materials and inventory management, and the implementation of lean principles across the entire value stream. Click here to learn about our supply chain consulting solutions.
Posted by LeanCor Supply Chain Group
We Teach. We Consult. We Do. LeanCor is a strategic supply chain partner that provides third party logistics, supply chain consulting, and corporate training programs. These three, integrated solutions – LeanCor Logistics, LeanCor Consulting, and LeanCor Training and Education – specialize in lean principles to help businesses better serve their customers by eliminating waste, decreasing costs, and building cultures of continuous improvement.Facebook LinkedIn Twitter Google+