11% cost cut with new distribution strategy

ifp consulting develops intelligent distribution strategy for building supply retailer

Companies need to offer higher service level and constantly cut costs in order to stand up to the competition. In this process, intelligent design of the distribution network plays a vital role.

The building supply industry is characterized by a complex and costly distribution and thus needs intelligent network design. The sales organization usually involves a large number of retailers and orders are often directly delivered to the construction site. Hence, distribution costs can account for 10-20% of the total sales price.

Our client is a large player in the market with over 5.000 retailers across Central Europe. The company currently operates two distribution centres and a fleet of over 140 trucks to be able to offer multiple deliveries per week, accounting for over 25 million Euro in total costs.

The new distribution strategy saves the client around 3 million Euro annually

The new distribution strategy developed by the supply chain experts at ifp consulting generates 3 million Euro in savings per annum. The strategy implements a new delivery concept, which comprises of three distribution centres and optimized delivery areas.

In order to determine the perfect location for the new distribution centres, transportation as well as personnel costs were factored into the solution. Additionally, the daily connections between the five production sites were also incorporated into the schedule.

The new distribution strategy was specifically tailored to the needs of our client. A major prerequisite was that the implementation could be carried out with the existing staff in order to fully utilize its experience.

Supply chain excellence by design

ifp consulting is a leading consultancy in intelligent supply chain design for medium and large sized companies. With the expertise of over 30 years and state of the art methods and tools, we develop sustainable solutions that work.

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