SCE Helps Health Products Company Reduce Supply Chain Costs While Improving Customer Responsiveness
An international consumer and health products company sought to achieve greater efficiency and productivity in logistics.
SCE helped the company assess the performance of its current 3PL, and subsequently find a new provider capable of delivering greater value.
The company now is saving 6 percent on its logistics costs each year, and has access to world-class, scalable capabilities.
Although the company already had outsourced logistics and freight to a 3PL, it believed it could achieve even greater efficiency and productivity. For help achieving this goal, management approached Supply Chain Edge (SCE).
Our proprietary Supply Chain Alignment and Assessment process revealed that the company’s 3PL was, in fact, falling short. For example, in terms of customer responsiveness and logistics management, the company’s customers only gave the company a rating of “somewhat effective.” SCE’s in-person visits to the 3PL’s facilities supported this appraisal, revealing several instances in which costs and operations could be improved.
SCE set out to help the company find a new 3PL that could deliver greater performance and value. Working together, SCE and company representatives selected a 3PL with a world-class, multi-client facility rich in economies of scale and best practices. The provider also had invested in cutting-edge warehouse management and reporting systems that would give the company real-time visibility into order status, performance levels and productivity. The chosen provider had impressive scale as well: With $350 million in transportation spending each year, it would provide the company with much stronger buying power and more predictable costs.
Having helped the company select its new 3PL, SCE turned its attention to the transition, which would occur during one of the company’s busiest times of year. To achieve a fast, seamless switch during this critical period, SCE provided hands-on project management for the full scope of the transition. Our team used advanced project monitoring tools and techniques to keep the transition on track, and proactively addressed any challenges as they arose. For instance, during the peak of the transition SCE managed the allocation of inventory between the incumbent 3PL’s facilities and those of the new provider, thus ensuring customer orders would be fulfilled with minimal disruption, and that expensive re-shipments would be avoided.
SCE also worked to uncover and pursue additional improvement opportunities as the initiative progressed, while tracking and reporting savings as they were achieved. In fact, one of the most critical aspects of the transition was the establishment of key performance indicators (KPIs) against which the company’s new logistics capabilities could be measured and continuously improved.
By teaming up with SCE, the company now is saving approximately 6 percent each year on its logistics costs—a major benefit, especially during challenging times in the transportation industry. Even more importantly, the company has gained access to world-class, scalable logistics capabilities that will support differentiated customer service and robust growth for years to come.