Growth supported by logistics network optimisation
Part of a privately owned, international business, this New Zealand organization with revenue of $180m identified the need to design an optimal logistics network to minimise complexity and cost whilst supporting both the current business and its projected growth across the North and South Islands.
Redesigning the network
Prological completed a current state assessment through operational observation and data analysis to identify internal freight capability, third-party freight capability, and cost-to-serve by customer and brand.
The detailed cost and activity baseline was used to model and optimise supply points and the freight network to meet cost and service requirements.
Unlocking capabilities and opportunities
Our team identified a number of opportunities for cost reduction that would ultimately deliver in excess of $1.5mil (12%) per annum. The opportunities would be derived from:
- consolidation of freight spend and alignment of rate cards across the somewhat siloed business units
- a robust and collaborative procurement process with a designed and prescriptive requirements specification to include the consolidated business operations
- consolidation of activity for some brands and geographies
- operational optimisation to improve transport utilisation
- changes to stocking locations for some brands to improve service and cost.
