Key Operational Challenges

The company identified several challenges in its current logistics and procurement processes:

• Fragmented Transportation Network: Inefficiencies in coordinating transportation across multiple regions led to inconsistent delivery times and high transportation costs.
• Supplier Management Issues: Inconsistent sourcing strategies across regions created difficulties in managing supplier relationships, particularly with global and local suppliers.
• Escalating Costs: Increasing logistics costs per kilogram for transportation and warehousing were impacting profitability.
• Limited Benchmarking Data: The company lacked comprehensive industry benchmarks for understanding where they stood against competitors in terms of logistics infrastructure, transportation, and procurement efficiency.

Choosing the Solution

Ken Research was chosen as the consulting partner to assist the company in its benchmarking initiative. The study was aimed at identifying key data points and offering insights into competitors' network infrastructure, transportation efficiency, and procurement cost structures. The focus of the study was to address critical questions such as:

·  How much of the revenue do competitors typically allocate to logistics costs?

·  How do competitors maintain transportation efficiency while controlling warehouse expenses?

·  What procurement strategies do competitors employ to balance partnerships with local and global suppliers?

Process of Reaching a Solution

The benchmarking study was structured into three main areas:

1. Logistics Benchmarking:
   • Infrastructure: Analyzing whether competitors used shared or dedicated facilities, the type of racking systems, and temperature-controlled storage.
   • Transportation: Assessing the types of trucks, the number of transport companies used, and the logistics cost per kilogram.
   • Cost Analysis: Breaking down transportation and warehousing costs to provide insights into areas where the company could reduce expenses.
2. Procurement Benchmarking:
   • Network Coverage: Understanding the number of distribution centers competitors operated and how they distributed volumes between modern trade and direct stores.
   • Sourcing Strategy: Investigating the percentage of procurement spend allocated to local versus global suppliers and the number of strategic partnerships competitors had in place.
3. Efficiency Benchmarking:
   • Automation and Efficiency Metrics: Evaluating efficiency practices, including layer picking and automation in the loading process, to identify areas where the company could enhance operational speed and reduce labor costs.

Impact and Value

The results of the benchmarking study provided actionable insights that led to significant operational improvements:
• Cost Reduction: By identifying areas where competitors were spending less on transportation per kilogram, the company restructured its logistics network, leading to a 12% reduction in transportation costs.
• Optimized Supplier Management: The company re-evaluated its sourcing strategy, increasing its partnerships with global suppliers to align with competitors' cost-saving strategies.
• Increased Efficiency: Implementing automation and adopting best practices from competitors helped the company improve warehouse efficiency by 15%, allowing for faster loading and reduced handling times.

Conclusion

In today’s competitive era, constantly refining your operations can keep your business ahead in the market. Our recent benchmarking project revealed critical insights that helped a global leader align their logistics and procurement practices with industry-best standards. Backed by data-driven insights from Ken Research, the company streamlined its processes, reduced costs, and optimized its global logistics market infrastructure. The collaborative approach led to tangible improvements in efficiency and positioned them for long-term growth in their target markets.

Client Testimonial

"Ken Research's benchmarking study provided us with invaluable insights into our competitors' logistics and procurement strategies. The comprehensive analysis enabled us to identify areas of improvement and make strategic adjustments to our operations, resulting in significant cost savings and increased efficiency." – Senior VP, Supply Chain

Could your Logistics & Procurement team benefit from a similar Supplier Benchmarking?