Assessment Case Study - UK Omni-Channel Fashion Retailer

  • 22 September 2015
  • Number of views: 6977

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
  • 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:

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Categories: Case Studies