The following are just a few past projects and results.
Taking time out of E-commerce Delivery For Retailer
Opportunity: A large, multi brand e-commerce and catalogue retailer needed to reduce time and cost in delivering to both business and consumer addresses.
Action: Analyzed shipments, costs, and services provided. Stratified shipments, modeled costs, and identified patterns that would provide significant cost and time improvements, as well as negotiating leverage. Implementation included management of a structured RFP process, negotiations, carrier selection, rapid design, service/mode optimization, integration with multiple transportation carriers and white glove providers (TL, LTL, and Parcel), Integration with Parcel Management and Order Management Systems, and Identification of ship-from DC’s.
Results: This work led to reductions in transportation costs of 10% to 25%, while obtaining improvements in carrier service levels, consumer time to delivery, and improved internal operational effectiveness.
$30B Retailer’s Supply Chain Transformation Strategy
Opportunity: Large NA retailer hadn’t made significant investments in their supply chain or supply chain technology for many years and after significant acquisitions. Reoccurring supply chain issues included inventory accuracy, poor order service level, transportation issues, and as can be expected non-competitive landed cost.
Action: Starting with a rapid assessment against best practices it was concluded that multiple business capabilities did not meet industry standard levels. A strategy blueprint was developed with defined initiatives to transform the large supply chain by adding global import capability, needed capacity, implementing technology, and changing processes and organization structure. Supporting the strategy was a scenario based business case analysis for identified strategic and tactical process and system changes.
Results: This strategy as of this writing has been mostly implemented including new Distribution Centers, streamlined replenishment and better forecasting, service level improved by 3-5%, turnaround of highly mechanized DC’s including two new material flows and supporting systems, new warehouse management systems in multiple DC’s, national transportation model and new systems, supplier enablement processes have been implemented, new ASN and pallet labeling process in place.
WMS Implementation for Complex Retail Business
Opportunity: Aging, highly customized best of breed solutions existed for both WMS and TMS were approaching end-of-life. The client selected and standardized on Manhattan Associates (MA) for WMOS (WMS) and TP+E (TMS).
Action: We supported the full life cycle implementation of WMOS in two DC’s as part of a broader program. We performed a detailed requirements definition, followed by a complete fit/gap against the chosen MA solutions; the result simplified the interface landscape and identified critical issues early in the implementation process. The defined roadmap included design and deployment of multiple modules including future custom functionality, SCI reports, Slotting, ASN’s, and labor management. Our implementation process supported the design of: complex wave building logic integrated with transportation load planning & cubing; planning constraints based on available resources, put-away/replenishment/pick synchronization, and workforce management; a core set of modifications were tested and cutover; and a 3rd party manifesting solution for parcel carrier.
Results: Project benefits included sunset of costly to support IT applications, addition of new material handling methods, and 3-5% improvements in DC productivity.
Wholesaler Merger Integration
Opportunity: After completing the acquisition of three ‘complementary’ food service wholesalers, a private equity firm needed merger & acquisition implementation support across all business operations, IT systems, product lines & categories. Customers, DC’s and delivery operations needed to be integrated and rationalized to achieve synergies.
Action: Provided synergy analysis and network planning, business, IT and organizational change management planning, support & delivery throughout the merger. Activities included all master data conversion activities (item, customer, vendor, etc.,) business process redesign (simplification) and all related IT system applications / functions for finance & accounting, sales, merchandising, procurement, distribution, warehousing, transportation, etc. The merger significantly increased annual revenues and geographic footprint and combined a strong dairy & food service business that complemented their offerings’ as a leading distributor of deli, bakery, confectionary, seafood, packaging, food service and other items to grocery stores & specialty food chains. The M&A significantly increased their diversified customer base – servicing over 9,000 customer stop locations in more than 10 states.
Results: Through diligence, we identified and delivered approximately $9.2M of synergies in the combination of the businesses; and optimized their “hub-and-spoke” distribution method by rationalizing depots within their combined existing service areas. The combined entity is now executing all sales, business development, merchandising, procurement, distribution & fulfillment operations from a single location. Building modifications have been completed to existing facilities to expand warehouse space and capacity. The existing facility has been reconfigured to add space and to facilitate material flow / cross-docking. We also relocated most slow-moving / light-weight general merchandise to an adjacent building to optimize shipping & receiving operations.
Major Department Store with Catalogue and Internet Evaluates Outsourcing Fulfillment
Opportunity: Company came to us questioning the cost effectiveness of their operations and wondering whether it was better to outsource them or keep them in house. The questions involved fulfillment, returns processing and call center activities.
Action: SCG led a structured outsourcing analysis in each of the target areas. We worked with and evaluated the fulfillment and/or call center operations to determine the detailed and actual requirements. Built strategic “should cost” models for call center and distribution center operations. The models were used to assess scalability, operations improvement opportunities and potential, outsourcing evaluations and facility expansion analyses. These models developed the base line level of actual cost, taking into account the available improvement opportunities. The detailed RFP’s were created and the RFP process and tours carefully managed. Each of the vendor proposals were evaluated against both current and ‘should cost ’ base-lines. The negotiation process was conducted, based upon facts and knowledge of real costs. Implementation plans were developed where the decision was made to outsource. Plan was executed and outsourcing implemented.
Results: The structured process yielded accurate results free of emotional or non-business influences, with reduced risk and no surprises. The implementation planning was completed with both Company and two outsourced partners. Implementation was completed in three months. We have had several clients that performed this process and have made different business decisions with regards to whether to outsource different parts of their operations.
Major Department Store Outsourcing/Insourcing Transportation (by lane)
Opportunity: A major department store chain serviced their stores through a 100% dedicated fleet. They wanted to evaluate the use of common / contract carriers to replace the fleet in some or all of the lanes. Stores were delivered nationally from 7+ DC’s using a combination of full truckloads and multi-stop deliveries, with varying frequencies each week. The true cost of deliveries was not known. In addition there were store receiving and stocking factors that need to be included as well as meeting sailing schedules for some stores not on the mainland.
Action: Using Manhattan’s Transportation Procurement (TP) module we managed a structured carrier bid for all of their store delivery lanes. Detailed business and store service requirements were developed, as well as delivery frequencies, delivery windows, dock conditions, DC door requirements and backhaul opportunities. A pool of national and regional carriers were developed and invited to participate as well as being invited to the bidder’s conference. A strategic cost model was developed for the fleet operations on a lane by lane basis, to determine the real cost of servicing the stores. The bids were evaluated and compared to the fleets cost to serve. Lane assignments were negotiated with the carriers and allocated between fleet and carriers based upon both cost and service considerations.
Results: The size and mandate for the fleet were reduced, with the outsourcing of the long-haul lanes in the remote and rural areas. The cost of store deliveries was reduced by 5% while maintaining service.
TMS Implementation for Supplier
Opportunity: Legacy transportation planning was done with reports, spreadsheets, and manual intervention. Both company fleet and carriers used daily for TL/LTL and couriers utilized for parcel. The business had outgrown the legacy processes and systems causing significant inefficiencies and service failures.
Action: Created streamlined transportation process utilizing the MA transportation suite. Business complexity includes master data and order type issues, multi-modal, drayage, and USA and Canada LTL rate modeling requirements. We implemented the standardized transportation planning, execution and fleet management, closely integrated TP&E with other applications including WMS, OMS, and ERP. In the process, we cleaned up the Master Data, designed and tested the business rules for routing, tested and validated the TMS prior to go live, and supported the integration with other new and legacy systems.
Results: System implementation is ongoing at time of writing. When fully implemented, transportation suite will control all inbound, outbound, and inter-DC warehouse transfer activities. Benefits include 3% reduction in affected inbound routes and better fleet utilization.
SC Technology Strategy led to Full SC Operational Strategy With Addition of DC Expansion and Automationy
Opportunity: A $4B retailers had outgrown the capabilities of its legacy supply chain systems and DC capacity. To facilitate the required capital investment in new applications, an IT roadmap was needed to plan legacy system investment, integration planning, modification investment and resource needs for replacement of the existing supply chain applications. During this work it became clear that the sunset of obsolete of material handling throughout the facilities and new capacity needed to be incorporated into the plan.
Action: We developed, with the client team, a defined plan for the multiple application rollouts, defined transition architectures, new material handling, and DC automation. We supported the client team in creating a structured business / system requirements definition, detailed RFP, application identification and selection process. We developed a quantitative and qualitative scoring methodology to select the technology solutions, followed by a detailed business case development process to support the client in gaining acceptance from Senior Management. SCG led project activities including support service strategies, application planning, detailed project cost modeling, organizational change design, DC layout design, project and implementation planning.
Results: Project was credited as saving a $1M set of modifications and for reducing technology transition costs. Identified $12M in annual savings when roadmap is fully implemented. Implementation is underway.
Opportunity: Direct to consumer channels were experiencing rapid growth and expansion for multi-channel merchant. To meet growth targets, a hybrid implementation of new and outsourced DC network capable of meeting peak season demands and an expanding array of value added services. The aim was to deliver an industry-leading customer experience for the full order to delivery cycle.
Action: Conducted supply chain strategic assessment and design of new distribution model: item management, replenishment, inbound transportation, order management, fulfillment, and delivery. This design for first time shared buckets of inventory and purchase orders with bricks and mortar business. An “intersection” process was designed to support channel financials. Project included multiple site and process reviews, item sourcing and rationalization analysis, DC sizing analysis, and financial modeling.
Results: Following the assessment new facilities and business processes were implemented. This project supported them in becoming one of the most successful multi-channel retailers.
Retail Network Study
Opportunity: An off-price retailer had undergone significant organic growth. As supply lines grew, transportation costs were growing, and store service was suffering. This was impacting the in stock positions at the store level, merchandise sell through time, cost of goods sold and requiring additional investment in fleet resources.
Action: A complete logistics network analysis was performed. This involved identifying current costs and service for the company’s supply chain, then developing and quantifying multiple alternative configurations. The complete supply chain was analyzed to examine the costs of inbound merchandise, storage, handling and inventory costs and well as the outbound delivery costs to stores. Inbound and outbound volumes were gathered, factoring in seasonal and cyclical factors. Base line costs and service characteristics were calculated for the current network. Store and sales growth plans were defined for the next 5 years, as well as desired service levels. Utilizing an advanced optimization model, with a structured analytical process, multiple combinations of Distribution Center Locations and numbers of DC’s were evaluated. As alternate strategies surfaced, sensitivity analyses were performed to fine-tune the results to identify the best low cost, high service network for the retailer.
Results: Working closely with the client’s team, we developed a new network configuration that kept 3 of their 4 current DC’s, closed and relocated an undersized facility, and added one additional DC in their targeted growth areas. Stores were assigned to the optimal DCs to be serviced. Inventory levels and space requirements were calculated for each Distribution Center, including cross dock space for flow through distribution. Implementation budgets and business cases were presented to and approved by management. The updated network, had a 6% savings in transportation and overall operating costs, and improved store service and transit time.
Better DC Operations, Marketplace Expansion, and Duplicate Facilities for Wholesaler
Opportunity: In a high growth environment were asked to define: What are the conditions that warrant a new, partially automated, best practice, redundant DC? It was agreed early in the project that existing facilities needed to be retrofitted however acquisitions and new market requirements were pressing the business. This became an interdependent problem with the existing DC’s upgrades as new DC’s were needed.
Action: Identified and designed changes in picking and storage based on new product flows with addition of automation for the existing facilities as well as conducted a small network study that identified potential transportation savings. Implementation activity took place based on this work. With changes in the business we then focused on design of a new “standard” marketplace DC. In this design for the first time automation could be paid for in reduced DC construction rather than labor savings. This was due mainly on reductions in the cost of automation. Factors modeled in the marketplace DC’s include site cost , transportation costs, trade-off between running freight and building facilities, back haul offsets, savings for items sourced and sold in same market, and others. Interestingly it excludes case “Touch Labor” as relatively the same by markets.
Results: Better productivity and volume handling increases have been implemented in the existing facilities as well as transportation savings from routing and consolidation. The Marketplace model is considered better than the old “cookie cutter” as has reduced the time for specific marketplace analysis and improved decision making. New market sites can be modeled and if approved contracted and started with a dramatically reduced physical design required then previous practices.
Intermodal Barge Due Diligence
Opportunity: A Private Equity Firm was acquiring a financially troubled Intermodal Barge Line. They needed to know its operational viability and what cost saving opportunities existed.
Action: SCG performed operational due diligence prior to the acquisition, evaluating IT capabilities, staff and staffing , backhaul and lane management, business and dispatch processes, fleet maintenance, and dock side operations . Through quantitative analysis, economic and strategic cost modeling, and process mapping we identified the company’s strengths and weaknesses and quantified improvement opportunities.
Results: Cost savings opportunities were identified and mapped totaling 6% of revenues. These resulted in a 25% reduction in barge load / unload time and dock side container and chassis pool; methodology to capture $5 million in back haul offsets; maintenance improvements, an outsourcing strategy and reduced order to cash cycle time.