Retail

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Strategic Sourcing & Supply Chain Strategy 2

Our client, a multi-billion-dollar investment holding company had acquired several large Australian retailers with a network of more than 300 stores across the country, and was in the process of defining their future integration plans and capability requirements. With stability of product range, store expansion and e-commerce being key drivers for the business, the company engaged GRA to develop a strategy to deliver cost reduction, improved service levels and greater utilisation of company-owned assets. Key to this engagement was a strong emphasis placed by the client on ensuring supply chain expertise was incorporated into the development of the strategy to ensure a sustainable outcome was delivered. The resulting business case developed by GRA provided opportunities to reduce costs, improve margins and drive greater utilisation of company owned assets. It also delivered a strategy to establish a common infrastructure and enable future acquisitions to be integrated into a common supply chain.

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Strategic Sourcing & Supply Chain Strategy 1

GRA assisted one of Australia’s largest office supplies retailers to develop a global sourcing and supply chain strategy with identified benefits of over $8m. A strategic initiative to improve gross margin by implementing global sourcing resulted in significant cost improvements to the company’s bottom line. The company sought GRA’s expertise to unify their global sourcing and supply chain strategies into an integrated strategy, including identification of optimal locations for supply chain activities within the consolidated logistics network. GRA identified $8m in operational savings through more efficient management of import channels to handle the increase in globally sourced product. This was in addition to the expected margin benefits of sourcing more product from overseas.

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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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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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Inventory Optimisation, Demand & Replenishment Planning 3

Our client was looking to reduce and optimise inventory in Retail Stores and Distribution Centres, while improving in-stock position and service levels. GRA was commissioned to implement an advanced inventory planning system as well as re-engineered processes and practices to support the new tool. After the successful implementation the client realised a 6.6% reduction in inventory across the network in 3 weeks, 18% inventory reduction in Distribution Centres and Customer Fulfilment Centres in 3 weeks, 11% reduction in Excess Stock for ranged lines whilst experiencing no negative impact on customer service levels or in-stock position.

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Supply Chain Strategy – Network Optimisation

A large multi-billion dollar retail conglomerate with a strong focus on acquisition engaged GRA to review the physical footprint of its Automotive and Hardware supply chain. The scope was to identify opportunities to lower operating costs. GRA provided a supply chain strategy that prompted the executive team to consolidate specific business supply chains in order to maximise centralisation opportunity, both from a network and process design view. A physical network was recommended identifying operating savings in excess of $15m, and to support the strategy, an operational capability assessment was conducted to leverage and execute the advised strategy. 

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Strategic Supply Chain Planning Review (2)

Our client is an ASX listed national retailer with over 330 stores. Experiencing an increasingly complex supply chain the business was limited in its ability to manage costs and working capital. GRA was engaged as part of a complete business transformation process to increase capabilities and re-boot performance. Having reached the limit of current planning capabilities, our client looked to GRA to blueprint a best-in-class planning process and system to meet the organisation's strategic objectives. GRA conducted an intensive four week on-site review and developed a business case that was shown to deliver:

  • A payback within two years 
  • Enhanced supply chain functionality
  • Inventory reductions and stock availability improvements
  • Reduced operating costs
  • Significant store manager and planning team time efficiencies

 

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4PL Contract Improvement & Warehouse Efficiency Review

Our client, a multinational manufacturer, distributor and retailer of bicycles, is largely a marketing organisation, with outsourced warehousing and transportation to a fourth party logistics provider. Recently, a range of issues between our client and the 4PL arose where our client’s costs were higher than expected. Service issues were being experienced and changes in systems were required. GRA was engaged to conduct an end-to-end review of processes to identify improvement opportunities and to assist in stabilising the performance of the contract. The project led to a number of key changes in the way the contract operated, processes between the parties and operations in the warehouse.

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Testimonials

"I have and would continue to recommend GRA to companies reviewing either their supply chain strategy or day to day operations.”

– Mark Chapman, Supply Chain & IT Director at Pepkor

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)