Situation
Our Client, a global leader in the FMCG industry, whose products are available in more than 200 countries, was facing high stock levels and a complex supply chain that generated many hidden costs.
The company has two distinct product categories supplied separately through a highly dispersed network of 60 warehouses and over 30 distribution partners. The distributors were responsible for sales, logistics processes and cash collection.
Task
The client made a strategic decision to replace their distributor model with Direct- Store-Distribution (DSD) using 3PL operators for warehousing and cross-docking, while directly contracting 3PL fleet for the last-mile delivery.
Graphene Partners was tasked with designing an end-to-end solution in line with the client’s requirements. In parallel, distribution networks for two separate product categories would be combined into one, maximising logistical synergies and simplifying warehouse footprint.
Our role was also to ensure the project was implemented as designed and provide support until fully stabilized.
Actions
- The network design study was carried out to set the optimum number and localization of regional warehouses and cross-docking platforms
- The 3PL tenders were prepared and executed
- New 3PLs were selected and contracted
- Nine green-field regional distribution centres (RDCs) along with 25 cross-docking platforms were implemented and launched
- Goods from the 60 former locations were transferred to new locations,
- 10+ customer-owned properties were sold
- The last-mile delivery fleet was fully outsourced
- The distribution network was successfully transformed from two separate categories and distributor-driven to a unified 3PL-driven model
Results
- Over 6 mln EUR annual OpEx reduction
- Over 15 mln EUR generated cash from the disposed properties
- Transformation width zero CapEx
- 20% Inventory reduction
- CEO Award 2012 for The Best Supply Chain Transformation Initiative Globally
The collaboration has delivered the planned ambitious results, and our recommendations were fully implemented. Many of our best practices, including the 3PL contract template, were deployed globally by the client.
Project Info
- Services:
- Network Design
- Tender Management
- Transformation Management
- Real-Estate Contracting/Disposal
- Client: Global FMCG leader
- Geography: Poland
Our Role
- Subject matter expertise
- Analytics and modelling
- 3PL negotiation lead
- End-to-end contract drafting
- Support with implementation and property disposal
- Overall Programme Management
- SteerCo support