Winning the Cost versus Efficiency game
State-of-the-art warehouse consolidation solution improves efficiency and generates savings for the toy manufacturer.
Fast expansion becomes a double-edged sword when the rate of growth exceeds the speed of measures meant to manage it. If left unchecked for too long, it can lead to logistical complexities, throwing processes off-balance. In the case of our customer – a leading toy manufacturer – something similar happened.
For years, China has been a key manufacturing location for our customer due to its well-developed infrastructure and skilled labour. However, fast expansion and increasingly complicated logistics began to affect the efficiency of their supply chain.
As a supplier to some of the top global retailers, our customer was sourcing from many factories in South China. The difficulty in coordinating and managing multiple suppliers led to efficiency issues. At the same time, the general lack of visibility of shipment created excessive workload for the logistics team, leading to significant productivity loss, and operational bottlenecks. All these factors negatively impacted their operational costs, supply chain efficiency and revenue growth. Finally, the company started looking for a diligent logistics partner in the Asia Pacific to manage the complexity and scope of their regional service offerings while maintaining visibility of the shipments.
The customer wanted a provider who was not only reliable but also present in each of their factory locations. As the first order of business, we proposed setting up dedicated customer service teams in all the major sourcing areas to oversee respective consolidation processes. Next, we set up a Container Freight Station (CFS) where shipments could be consolidated from different locations and dispatched to the retailers.
Introducing consolidation has helped the customer in controlling transportation costs by maximising container space utilisation.
Our goal was clear: to improve shipment planning, visibility, and order traceability, reduce inventory and to create a more stable, integrated and synchronised supply chain setup.
Our strategic partnership with the customer has created a smoother supply chain that improved communication and enhanced the relationship between the customer and their suppliers. The customer is now able to reduce costs with better trucking arrangements and CFS consolidation services. Outsourcing warehousing consolidation business to Maersk has allowed them to concentrate more on their core business. They can now gain competitive advantage through reduced costs, supply chain improvements and better visibility.
With your support we have been able to optimize our Q1 shipments, something that has required additional and extraordinary actions from all of us. Without good partners like you, we would never have been able to anticipate so fast on ever-changing situations, and we would not have been able to ship our products to our customers.