The Scenario

This omni-channel UK fashion retailer saw UK store sales grow by 1.6%, internet sales grow by 30%, and wholesale decline by 42%. 3PL warehousing costs had gone up by 13.3% compared with the previous year. Consequently, the client was looking to find savings and efficiency gains throughout their supply chain to support a fresh strategy for UK stores and further expansion into overseas markets.

High costs in sourcing and inbound logistics, inefficiencies in distribution combined with low UK store sales necessitated a fresh approach to the current operation and WBS were assigned to provide a full independent end-to-end supply chain review and provide recommendations for a new supply chain strategy.

The Work

WBS Group Consultants were asked to pay particular attention to four key areas:

Inbound network: review of Far East, European and UK sourcing and logistics including cost and time scales

Warehousing: review of current contract with 3PL and their performance against KPIs

Outbound network: review of UK stores network both owned and concessions, review of wholesale network, review of e-commerce network, and review of international and European stores

Internal operation: review of purchasing contract decisions, sourcing policy, inventory decisions and their impact, and sales history vs forecast

Deliverables:

Deliverables: A formal performance review of the outsourced warehouse operation. This included a review of the current rates against benchmark 3PLs and a review of the current operational efficiency and effectiveness

A review of the upstream and downstream processes in the inbound and outbound operations in relation to the 3PL

Highlight and quantify the impact of responsibilities that are not within the 3PL responsibility stream and lie within the client’s decision making processes

Identification of potential value adding and cost saving opportunities and projects within the supply chain.

The Assessment Findings

The assessment identified several improvement opportunities:

Reduce reliance on air freight from 27% to industry standard of 5%

Tighter supplier contracts to maximise container and lorry loading

Reposition main warehouse to reduce inbound logistics cost

Set up distribution hubs in Europe to eliminate unnecessary transport to and from UK

Analyse UK store sales and change supply processes and time scales to ensure all stores are sufficiently stocked

Align KPIs across the supply chain to ensure a common business focus

Introduce A-B-C product classification to ensure correct stock levels

Depot positions not ideal

High variation in delivery time to main DC against plan

The Recommendations

WBS Group Supply Chain Consultants recommended a route map of improvement initiatives that could be implemented as an integral part of an overall supply chain strategy:

To find out more about how our Supply Chain Specialist Consultants can help you and your end-to-end supply chain, contact us today.