Network optimization & Inventory rationalization
Situational overview of the project
- Customer’s supply chain network consisted of 20 sourcing points (CM & plants), 4 MDC, 24 CFA and approx. 1800+ distributors
- Objective was to identify common synergies in two business segments leveraging on common space and resources.
- Business model to be changed from CFA to 3PL with existing service level and cost optimization.
Approach & Strategy
- Optimization of network through warehouse consolidation
- by working on five scenarios
- Cost reduction ranges from 4% to 9%(best case)
- Impact on service level was minimal while Inventory reduction was not evaluated to full extent
Final results
- Warehouse Infrastructure design and storage layout with HD racking
- Space reduction by 18%
- Costs benefit analysis with returns due to capex investment
