Agile supply chain
Industrial goods & services, Operations management

Agile supply chain 

A global manufacturing & trading company started this initiative, with the support of Arthur D. Little, to enhance the agility of its supply chain and significantly improve its cost base towards best in class


Complex supply chain was a hurdle for profitable growth

Our client was facing performance problems. The global supply chain was characterized by a loose global network of more than 30 warehouse locations, with strong variation in size, portfolio, complexity and performance of sites.

There was a complex, multi-layer structure which did not fully support the fulfillment of customer requirements or represent the needed center of gravity to serve its clients with the required service levels and in the most cost-efficient way. 

Therefore, there was limited ability to support an aggressive profitable-growth strategy fueled by last-mile concepts to enhance customer penetration. 


Development of the optimal target structure considering the given framework conditions

In the first phase we covered detailed baselining of the project. External and internal SC requirements were defined, and the supply chain performance and costs were analyzed. In the second phase we defined, together with the client in several high-impact workshops, a 2-layer logistics structure with a robust regional hub and a very flexible local satellite set-up that fully supported last-mile concepts in each country.

On the basis of customer density and shipments analyses, we simulated brown- and greenfield scenarios and related future service levels with the different scenarios by means of the ADL Net Tool. These simulations were done on the basis of the given quantity structure, a defined cost function, and service levels such as delivery times of 24 and 48 hours. 

In a series of workshops we iterated the defined target structure towards an end-state structure acknowledging existing constraints such as staff retention, new volume structure after transfers, tax implications and existing legal obligations. The end-state scenario was verified in a further step by an analysis of future customer densities and expected demographic developments in the affected regions. 


Path to growth released

A new footprint structure with very detailed transition planning (including risk assessment) has been executed, and a further- improvement program for the remaining sites has been initiated.

~ -15% logistics costs (including site improvement) significant increase of all related logistics performance metrics

We could have never done this initiative with this methodological thoroughness and structured involvement of all experts and stakeholders without the help of the Arthur D. Little team