Supply chain management & logistics

Supply chain management is certainly more than just a new name for familiar functions such as logistics, transportation or warehousing. For many companies, it has become an essential corporate function. Supply chain management sidesteps function-based corporate organization and integrates the core value creation functions into an end-to-end process.

Empty shelves. Cargo holds with room for more containers. The picture would look bleak to anyone, but can turn into a nightmare for logistics experts. After all, an efficient and reliable supply chain is a key enabler in satisfying customers' needs by punctually delivering high-quality products. Furthermore, for manufacturing and wholesale companies alike, this chain is also at the core of efforts to reduce costs – and in most cases presents significant potential for improvement.

Increasing product differentiation, globalizing value chains, process efficiency and supply chain responsiveness are the issues that are making companies think long and hard about their supply chains. This is happening in virtually all industries. Companies that fail to adapt their organization, processes and fields of activity to these technological and structural changes are not only squandering the opportunity to gain competitive advantages. They also run the serious risk of losing touch with the new type of marketplace that is now emerging and will confront them all a few years from now.

Roland Berger Strategy Consultants has developed a unique model to support its clients. We understand the supply chain as the backbone of every company, and therefore we develop supply chain strategies that are in line with and support the corporate strategy. Together with the strategy, we develop the required operating and supply chain model and define performance targets in terms of service levels as well as cost and asset performance. As the next step, we establish a detailed concept for putting the intended supply chain model into practice. Depending on what exactly needs to be improved, we apply a set of eight levers for supply chain excellence.

By applying this model, Roland Berger Strategy Consultants has been able to successfully complete numerous projects across all industries, helping companies to adopt these philosophies and significantly improve supply chain performance.

Supply chain transformation

We supported one of the global leaders in dialysis products and services in its supply chain transformation in Europe and Latin America. As a first step, we defined models that described key levers for the future supply chain design, e.g. rolling forecasting, central supply and demand planning, etc. Based on this blueprint, we integrated all processes from forecasting to distribution planning including the required IT backbone. Finally, we organized the supply chain in such a way as to ensure the coordination of supply chain processes across functions. We also introduced a KPI system for supply chain performance monitoring. This transformation improved the company's demand orientation, made its supply chain more flexible and cut inventory costs by 30%.

Performance improvement and supply chain segmentation

We supported a leading Swiss chocolate manufacturer in improving performance and building up a dedicated supply chain for its private label business. The existing supply chain, mainly built for the national brand business, did not meet the requirements for private label exports. So the company fell short of its profitability targets. To solve the issue, our approach was focused on supply chain segmentation: Based on the market requirements for the private label business, we defined the right operating model and supply chain levers: Product standardization and modularization, late stage differentiation, production flexibility, lead-time compression, lot-size optimization, renegotiation of contractual agreements, e.g. minimum order sizes, etc. This performance improvement and supply chain segmentation generated an EBIT increase of almost EUR 20 million and expanded delivery capability in line with the aggressive growth targets.

Optimizing warehouse logistics and inventory

One of the world's largest automotive suppliers asked us to improve the performance of its warehousing and inventory operations. We identified full-year annual cost savings of USD 1.7 million from warehouse process reengineering alone. By using a dynamic logistics model based on industry benchmark rates, industry tenders and client information, we identified seven key cost drivers and pinpointed the implementation scenario that would cut costs and maximize quality. By optimizing the client's push inventory system, we tapped further potential, reducing both storage costs and working capital.

Optimizing the supply chain

We evaluated the supply chain of an international electronic component manufacturer, and identified potential savings of over USD 100 million by analyzing product value, insourcing assembly, slashing cycle times and reviewing manufacturing location profiles. As a result, new purchasing processes were defined, direct shipment to customers was introduced and logistics complexity was significantly reduced.