Scenario modelling to support business decisions.

When you know what you want to achieve, but you need to understand what decisions will be required over the coming years.

Our client was an established 3rd Party Logistics (3PL) provider, that was in the process of taking on a new UK wide customer. 

This customer was looking to increase market share through a significant change in pricing policy and wanted to understand what network should be put in place over the coming years in order to support this growth.

Sector

Logistics

Timescale

16 weeks

A shift in focus.

Our first step was to build up an understanding of the current network – what it could handle, what growth capacity each warehouse could handle and a view of the relative efficiency of each site. From this, a view of the realistic options could be built up; given lease breaks, when could sites be exited / which sites were a priority to leave / where were the parts of the country that were under-served.

With the absence of any forecast volume at anything other than the highest level, we built a data pre-processor, to allow potential forecast scenarios to be explored, answering ‘what if’ questions such as ‘What if all the growth is in this type of customer?’, or ‘What happens if the average cube of product changes by 20%’.  This allowed us to focus on priority areas to support the strategy.

Finally, we built a network optimisation model, to look at the cost of serving the customer base through alternate network structures and volume forecasts.  With the absence of any certainty on what might happen, it allowed the customer to test a series of scenarios, and build consensus on what ‘must’ be done and what likely next steps were in the light of the impact of pricing changes.

A Cost to Serve analysis makes sense of what it actually costs to serve customers, bringing with it valuable insights and opportunities for improvement.

Data driven decisions.

We delivered the insight to get the decision making moving.  In the absence of detailed forecasts that the business could sign off, we provided a framework to allow the customer to confidently make the decisions that were required with as much confidence as possible, understanding the trade-offs that they were making, and setting what was required in order to support the business in the coming years.

Related Services

A growth strategy plans create sustainable, long-term growth and capture a significant share of the market.

This service will be valuable to you if:

You are anticipating rapid growth in the next 5 years.

You are about to launch a new product of service.

Your warehouse is at maximum capacity.

You are struggling to meet current demand.

Decision analytics uses historic, current, and predictive data to give businesses confidence in their decisions.

This service will be valuable to you if:

You want to use data for decision making.

You want to better understand how to define success.

You are interested in analysing new KPI’s.

You want fresh insights into difficult challenges.

Demand forecasting is a critical business requirement to support a range of business functions.

This service will be valuable to you if:

You want to free up cash held in excess stock.

You want to improve product availability.

Your business has a seasonal demand.

Your procurement team wants to stop ‘fire fighting’.

What it actually costs to serve customers, bringing with it valuable insights and opportunities for improvement.

This service will be valuable to you if:

You don’t currently use cost-to-serve as a metric.

You want to benchmark your operations performance.

You want to identify opportunities to reduce costs.

You need to streamline your supply chain activity.

Reach out to us with your questions.

We're excited to get back out and chatting about all things supply chain.

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