Strategic decisions for a smarter supply chain network
KPMG helped a growing diversified manufacturer define an optimal distribution network, efficiently positioning raw materials and finished goods.
Strategic decisions for a smarter supply chain network
KPMG helped a growing diversified manufacturer define an optimal distribution network, efficiently positioning raw materials and finished goods.
Client
A global diversified manufacturing and distribution company
Sector
Manufacturing
Project
Distribution network design
Our client is a global diversified manufacturing and distribution company. The organization had recently broken ground on a new manufacturing site in the U.S. and recently purchased a new brand name of consumer products that are made from overseas. Additionally, the evolving consumer expectations for online purchases of product were creating unforeseen challenges.
The new geographic footprint led to a network imbalance. The client needed to understand the most efficient way to position its raw materials and finished goods in order to make, store, and ship items to customers (given the addition of a new facility). The introduction of higher volumes of inbound goods flowing from Asia was an increase into the network versus what the client had previously managed. The acquisition of the new brand also led to an increase of online direct-to-consumer orders. Requirements that came with the e-commerce channel included quicker pick-to-ship times, procurement of packaging and dunnage, larger labor force, and faster delivery to customers.
Our client was looking for a strategic partner who could help define what the most optimal distribution network looks like and drive its overall network strategy into the future. Key elements needed for the client were improved network utilization and reduced cost. After some deliberate and careful evaluation of the different service providers in the market, the client chose KPMG as its business partner.
One scenario developed for this client has the potential for 13% operational cost savings, driven by a new distribution center location, inventory positioning optimization, and transportation costs improvements.
Based on our experience of working with clients in a wide range of industries across the globe, we have developed a wide-ranging methodology that supported our client through its decision-making process of its supply chain network landscape and structure for the future. KPMG assessed the impact of the client’s consumption of the newly acquired consumer brand into its distribution network, the influence of a new facility with regard to distribution, and provided insights to insourcing versus outsourcing its direct to consumer business.
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In positioning our client for the future, we’ve delivered benefits in three key areas:
Network capacity and costs
To help the client identify an optimal distribution scenario to drive efficient operational performance and costs, KPMG:
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