By simplifying a complex supply chain, we helped create major financial gains.
The Background
Our customer is a major US retailer with hundreds of stores across the country. They supplied their goods across these stores from 15 distribution centres (DC) located in various points.
They were purchasing merchandise from a major apparel manufacturer that imported its goods from Asia. These goods arrived through different gateways to the country and were then brought together, using a multi-modal transport system, to a DC in Jonesville, North Carolina.
From there, the goods would then be trucked to a consolidation centre in Tennessee, and subsequently to various DCs across the country.
The Challenge
They were contending with a supply chain that was complex, inefficient and expensive. They required a solution that not only simplified their supply chain but also improved the efficiency of their business.
The Solution
Working along with the customer and their supplier, we designed and implemented a ‘DC Bypass’ program. Through this, we eliminated unnecessary transport and handling, like the cross-country intermodal trucking, the supplier’s DC, Less Than Truckload trucking and the retailer’s consolidation centre. As a replacement, we used our facilities in Carson and Newark to organize the cargo movement more efficiently.
This enabled us to consolidate the supplier’s merchandise with other merchandise destined for the retailer and send full truckloads to the retailer’s DCs, and even directly to some of their stores.
The Result
The new approach not only enabled us to simplify our customer’s supply chain but also make it more reliable and flexible. This allowed them to make better buying and distribution decisions.
By cutting out needless junctures, we were able to reduce their lead times by 2 weeks, meaning our customer is now quicker to market with new products.
Importantly, we were able to generate a combined cost savings of $10.6 million for the companies involved. And incidentally, freed the customer from the need for company-owned assets like multiple DCs, trucks and additional staff.
Lastly, the DC Bypass approach reduced the customer’s carbon footprint, making them a responsible corporate citizen.
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