Visualising costs and service of networks to set out distribution strategies
Our client had organically grown its distribution footprint as the business had grown around the world.
As volume stabilised, the business wished to look again at both the underlying cost base and how well the network served its customer base in each region.
Global challenge
We undertook this study across a number of geographies, and in each case the first step was to build up a full picture of the end to end flows and costs of the existing network.
This allowed us to build (and in later engagements, refine) an activity cost model to reflect the costs and flows of the supply chain. Once calibrated, this model would allow scenarios to be compared, with analysis of both the service provided and cost to serve the customer base.
A connected result
The successful outcome of these projects was obtained through two distinct areas:
Stakeholders signed off on the numbers – achieved not just through the analytical work we undertook, but also through the way we worked with the whole community of people who had a view on operational costs, and ensured they were on-board with the scenarios generated.
We tested ‘all’ scenarios – projects such as this can be fatally damaged if they do not test and coherently close enough any ‘pet theories’ within the business. As an external consultant, the obvious scenarios may well not cover the view of a ‘C-suite’ executive – including these within the project is vital if the outcome is to be delivered.
