Consumer Packaged Goods Manufacturer Operational Improvement
A $1.4 billion North American personal care product manufacturer had a portfolio of 8,000 SKUs, which were distributed to food, drug, and mass merchandise stores and warehouses in the U.S. and Canada from four manufacturing sites. Several unsuccessful efforts by the company to address its order fulfillment lead times, distribution center productivity, seasonal highs and lows, and overall customer service levels led its senior management to secure consulting and interim management services from Supply Chain Edge.
Supply Chain Edge led an end–to–end supply chain assessment, from finished product release, to the distribution and customer service organization, to retailer sites. Based on this assessment, we implemented a distribution network reconfiguration, reducing distribution sites from four to three, increasing fulfillment capacity by 30%, and establishing emergency fulfillment backup processes. We also implemented a physical material handling system to optimize line and case fulfillment, transportation planning, and shipping functions. Finally, we implemented a new order flow management system that reduced redundancies in the current process and delivered improved quality and customer service — all at reduced cost.
With our help, the company successfully improved both internal productivity and customer service. More specifically, throughput was boosted from 65 to 270 cases per hour per facility, line fulfillment improved by 135%, fulfillment accuracy increased by 85%, orders filled complete grew to 97% from 88%, and internal order cycle time was cut in half, to 1.3 days from 2.7 days. Perhaps most compellingly, all of these advances came with a cost savings: Fulfillment unit costs moved from 2.3% to 1.4% of gross sales.
