A private-equity backed manufacturer and distributor of industrial electrical components.
A U.S.-based manufacturer and distributor of electrical components was shipping from 3 warehouses, and all were at or near full capacity. With the company’s aggressive growth plans – both organic and acquisitive – they were looking to better understand their footprint and operations. We came in to advise on the network cost impact of consolidating warehouses and to identify other value-creation opportunities.
We assembled a team of experts from supply chain, operations, and continuous improvement to focus on network optimization and SIOP processes. We:
- Analyzed current state DC sizes, capacity utilization, processes and systems
- Assessed opportunities to compress space requirements through optimized inventory levels and through more efficient layout and space utilization
- Determined the impact on fixed and variable labor, facility expense and overhead costs
- Modeled the U.S. outbound transportation network including all Manufacturing Representative Distribution Centers
- Mapped out the financial impact in conjunction with their five-year growth plan
- Identified $8.7M of savings in operating expenses through network optimization and warehouse consolidation
- Recommended the implementation of a SIOP process to achieve an $18.2M reduction in net working capital and a $12.2M savings in annual carrying cost through the implementation of a SIOP process
- Discovered an opportunity to improve inventory mix to achieve targeted service levels
- Identified additional inbound freight savings opportunities and fulfillment labor efficiency opportunities
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