DISTRIBUTION

CASE STUDY: Distribution Optimization UK

Industry:
Global Steel Manufacturer
Company Size:
160,000+
Project Location:
Germany / United Kingdom
Problem Statement:
Due to globalization effects and Asian competitors pushing their products on the European market, our customer, a global steel manufacturer, was forced to reduce their production and logistics costs in order to remain competitive. One of our customer's strong export markets had historically been the UK, but due to it's geographical location, cost pressure had been increasing over the past years. If we would be able to reduce the logistics and in particular the distribution costs from their German plants to the UK by approximately 20%, our customer should get into a better competitive position and secure their sales volumes in the UK.
STREAMLINERS’ Approach and Solution
Meeting:
Understand needs and requirements of UK customers, in particular minimum order quantities and transit times; get overview of production plant locations in Germany
Deep Dive:
Detailed analysis of current logistics and distribution set up for the UK; benchmark freight and distribution costs of current set up; conceptual design of optimized freight and distribution system
Hypothesis:
All shipments to the UK are currently scheduled on so called "UK area tours" (e.g. South, Wales, North) with direct deliveries from the German plants to the UK customers. The consequence are long hauling distances in the UK with underutilized trucks. If we deliver all UK shipments to a consolidation and distribution warehouse in Rotterdam (NL) and transload the shipments on specific "UK county trucks", best-fit ferries and seaports can be selected and only fully utilized trucks will perform the long haul within the UK. This optimized set up should achieve savings around the target range of 20%.
Project:
1 consultant
8 weeks
Deliverables:
Consolidation and distribution warehouse in Rotterdam contracted (3PL)
New routings aligned with sales and updated in SAP
New UK distribution process implemented
Bottom Line Impact:
Transit times reduced by 2 days
Cost savings of >$0.4 M (approx. 22%)

Optimized Routing

 

Fees vs. Bottom Line Impact