Challenge
A retail company faced increasing challenges due to growing variability of lead times from Asia and changes in the senior supply chain leadership team. The middle management local leaders lacked experience necessary to step up and change the supply chain policies to face new reality which resulted at first in product shortages and afterwards increase in stock levels and double digit logistics cost increase.
Actions
In order to address these challanges and prepare the next generation of leadership from within the organization the company CEO requested our Shadow Management Support. The logistics leadership team was provided with ongoing aid for 12 months which consisted of: Mentoring and training: The aid consisted of bi-weekly strategy development sessions and structured mentoring program focused on building business acumen, holistic thinking skills, supply chain management expertise, and understanding of up-to-date logistics technology. Analytics tools implementation: During this period advanced analytical tools and systems were introduced to the logistics function which enabled data-driven decisions making process. The logistics management team consulted our experts repetitively to ensure proper vendor selection and implementation process. Supply Chain Director Role Development: Within the project new scope for supply chain director role was concived together with the CEO and internal selection process was conducted. The selected candidate was guided on the transition process and took the role within the scope of the project.
Results
Better understanding of logistics function challenges as well as business requirments by the logistics management team resulted in redefinition of monitored KPIs, decrease in overall stock levels by 18%, and improved customer service level by 0.8p.p. Significant productivity improvements were achieved within company warehouses due to better supply chain planning and capacity management. This enabled company to maintain +/-1p.p. cost of logistics over sales budget despite 5% plus increasing costs levels across the industry. With new supply chain director in place company is well positioned to perform well in the future and have cross-functional aligment on priorities and strategic goals. This success story shows how important is senior leadership understanding, especially in complex supply chains, spanning several continents and multiple countries.
Short summary
A retail company faced lead time variability and supply chain leadership changes, leading to shortages and higher costs. Shadow Management Support was sought, resulting in mentoring logistics team, and new supply chain director over the process of analytical tools implementation, and change of KPIs. The company decreased stock level by 18% and is better positioned for success.