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.

Information technology, globalizing value chains and system sourcing 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. For every supply chain project, we think from the inside out: starting from the strategic objectives set by the company, we identify the enablers that are required throughout the supply chain. These enablers in turn determine what actions are needed to drive supply chain performance and achieve the company's overall strategic goals.

Project work and continuous dialog with a distinguished international academic network have helped us identify six best practice philosophies:

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.

Reorganizing merged retailers

Following the merger of two national retail champions in Europe, 50% of warehousing and 90% of transportation operations were outsourced. The two existing warehouse and distribution networks therefore had to be extensively reorganized. Drawing on our experience from similar projects, we aligned logistics strategy with corporate strategy and simultaneously merged the two networks.

Optimizing the distribution network

A project involving a top player in the consumer goods industry focused primarily on cutting transportation and warehousing costs and shortening delivery cycles. To ensure a strategic fit from the inside out, activities along the entire supply chain were reviewed – from order management to product pricing. We developed and quantified three scenarios for the future supply chain strategy as a function of overall market developments. We then drew up a roadmap of activities and recommended further actions.

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.