Manufacturing & Distribution

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Supply Chain Network Optimisation (Llamasoft)

Our client is a publicly listed company that sources and manufactures bathroom and kitchen products nationally to trade and consumer channels across Australia. They were undertaking significant business transformation, which included changing their business model from being a primarily locally manufactured organisation to an internationally sourced one, and needed help to compare sourcing & distribution network options that could be deployed to improve service level performance whilst reducing working capital and costs. GRA were asked to build a model to assess the viability of a number of sourcing & distribution operating scenarios. The team used Llamasoft Supply Chain Network Optimisation Software and Tools to create a model that demonstrated that a segmented service offering could deliver enhanced overall service performance (from 80% to 95% line fill rate) with further enhancement of priority products (to 99%  line fill rate). The results of the modelling efforts were used to inform executive level business strategy planning which has subsequently resulted in the business halting a declining market share, increasing EBIT, Margin % and TSR compared to benchmark organisations.

 

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Supply Chain Planning Integration Improvement

Our client,a large FMCG dairy manufacturer with approximately 85% of its volumes being delivered to the major supermarket retailers was experiencing significant growth. In order to service this growth profitably, the manufacturer was looking for the optimal way to collaborate with the retailers to improve the accuracy and velocity of its planning processes. We worked with our client to achieve the following outcomes: safety stock days cover was reduced by a quarter; high service levels and low write off cost were maintained despite lower inventory; increased visibility of the promotions, leading to better collaboration when comparing forecasts; improved low stock allocation processes; faster planning cycles effectively leveraging the planning already performed by the retailers.

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Operations Review

Having grown rapidly since being established, our client, a stationery wholesaler and online retailer, had outgrown their current operations and were concerned about their ability to support anticipated future growth. GRA was engaged to review their current warehousing operations and planning processes in order to identify the capability and improvements required to support the business in both the short-term and long-term. Our assessment identified two critical junctures for the business to plan towards – one within the current year, the other longer term.

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Planning Assessment

Our client, a manufacturer and distributor of food solutions, had doubled their revenue within the last seven years, so were looking for opportunities to ensure their systems and processes were able to support their continued growth. Additional challenges our client faced included a recently implemented ERP system that was not being leveraged to drive purchasing requirements, unclear roles & responsibilities, multi-level substitutable BOM components, a high proportion of product innovation and introduction, and a high supplier volatility. GRA was engaged to review their current supply chain and develop a roadmap that would deliver the required improvements. 

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Supply Chain Strategy – End-to-end design (network, imports & online)

A multi-billion dollar investment holdings company had acquired several large Australian retailers with a network of more than 300 stores across the country. GRA was engaged to review the discrete supply chains of each brand and design a Group-wide supply chain strategy to minimise costs and enable growth through to 2020. Our client sought assistance to create a business case for the board to optimise the supply chain footprint, network and import methods. They also wanted to commit to a scalable, shared supply chain strategy moving forward. 

GRA developed a strategy providing opportunities to reduce costs, improve service levels to stores and drive greater utilisation of company-owned assets. We also delivered a strategy to establish common infrastructure and enable future acquisitions to be integrated into a common supply chain. GRA identified around $14m in cost reduction in the first 5 years at a net present value of $6m after taking into consideration the required investment. 

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Supply Chain Network Optimisation 6

Our publicly listed client operates a national wholesale and retail distribution network with warehouses in each state. GRA was commissioned to explore opportunities to rationalise their distribution network and improve working capital without compromising the customer experience. We defined the current network structure, flows and costs and the potential network scenarios that needed to be assessed. Recommendations were made for optimised distribution networks and transportation routing, inventory holdings and flow, and property footprint. Immediate opportunities included an annual distribution network savings of $7.9 million (7% of operational costs) whilst meeting current customer delivery time performance; and transportation network annual kilometre reduction from 48 billion to 42 billion kilometres (11.5%) providing both an economic and environmental benefit.

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Supply Chain Strategic Review

Our client is an after-market and OEM four-wheel drive equipment manufacturer in Australia and Asia distributing into global markets. They faced many supply chain challenges, including sales split between Australia and the rest of the world, customer service and 'closeness to supply' expectations not being met, and planning and operations management processes not fully integrated and aligned. GRA undertook a strategic review of our client's supply chain and delivered a clear roadmap of organisational capability improvements to provide immediate improvements, opportunities to optimise inventory and quantified current and proposed models that clearly illustrate the cost and structural benefits of an alternate supply chain strategy and design.

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Warehouse Operations Review

Our client, an international manufacturer and distributor of pharmaceutical and medical products, supplies the Australian and New Zealand markets with approximately 700 products sourced from their factories in Europe and the USA. In order to support their growth plans, the client engaged GRA to review their current warehouse operations in order to understand whether they were capable of supporting their business for the next 3 years and beyond. Solutions were proposed to improve operational workflows and productivity (reducing labour costs by 17.5%), handle products more effectively and extend the life of the current facility to the medium-term.

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Testimonials

"GRA worked closely with us to develop a comprehensive supply chain strategy to strengthen our business in a rapidly changing retail landscape. The level of interaction and engagement with our team was exceptional, ensuring a high degree of buy-in for the strategy."

– Brett Kelly, National Supply Chain Manager, Officeworks

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)