Linking Sales and Operations in a Global Consumer Products Distribution Company
After several years of stagnation and an executive management turnover, the new management team was determined to approach their markets with a refreshed and unrelenting approach. Their plan was aggressive – rapid new product introductions partnered with a global sourcing strategy to keep them ahead of the competition. This initiative however, was failing to progress as planned. The dynamics of the market were changing, competition was stiffening and the world was on the edge of a major recession. These forces quickly dismantled our client from their dominant position in the marketplace.
Recognizing the challenges ahead of them, management knew something had to be done, but was having a difficult time pinpointing the issue. TriVista was retained to complete a corporate-wide supply chain and operational diagnostic with emphasis on supplier development, sales and operations planning, and new product development.
TriVista utilized an in-depth diagnostic approach evaluating all critical supply chain, operational processes, and activities:
After significant data analysis and company-wide interviews, TriVista consultants identified significant gross margin improvement and working capital improvement opportunities. Our team found that existing forecasting and new product development processes and practices were driving up inventory levels rapidly – causing a significant working capital challenge for the business and creating E&O inventory levels that the company could not continue to sustain. In addition, the deficiencies in the forecasting processes were causing downstream harm to supplier operations in Asia.
Through detailed analysis of supplier operations throughout China and Interviews with Supplier Management teams, TriVista discovered that price increases being driven by rising labor and raw material costs could be offset through improved forecasting methods – allowing suppliers to purchase bulk raw materials with scheduled deliveries, creating significant economies of scale and driving down costs.
Recognizing that making changes to every part of the supply chain was neither practical nor achievable in the short term, our team developed a comprehensive benefit/effort analysis to assist the client team in prioritizing improvement efforts and creating a go-forward implementation plan.
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