Situation

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A European flour company was challenged with high costs and poor logistics service in supplying products to their main customer in the United States.

 

Challenge

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The end customer in the United States required the client to maintain a warehouse with safety stock near its facility. In addition, the client wasn’t entirely satisfied with the service of the incumbent logistics provider handling the supply chain. 

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The client tasked LogiChain Solutions with optimizing and re-designing the supply chain from Europe to the United States with the goal of shortening the lead time and reducing overall costs.   

 

Action Steps

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Rene first assessed, evaluated, and mapped the end-to-end supply chain network, including routing, logistics partners, lead-time, contract terms, and all logistics cost elements. 

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This was followed by the development of an alternative supply chain network and operating methods with cost simulation.  Rene made recommendations and provided a roadmap for an optimized supply chain and distribution network design. 

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A market assessment identified potential logistics providers for the end-to-end supply chain as well as individual logistics elements like warehousing or ocean freight. 

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Rene also conducted a RFP with the identified 3PLs and an evaluation of the short-listed 3PLs. From the proposals, he provided a recommendation of which 3PL to select and facilitated in the negotiation of the logistics providers’ contract terms. 

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To conclude the project, Rene supported the client in the transition and startup phase, and monitored the performance of the 3PL in the first three months. 

 

Results

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The benchmark analysis revealed significant cost saving and lead time potential. Based on Rene’s recommendations, the client selected a 3PL that could manage the entire end-to-end supply chain with more than $250,000 in annual savings (more than 15%). The new supply chain network design also led to a reduction of lead time and carried inventory by more than 20%.