A Global Cosmetics Company needed to identify solutions to optimise its logistics network in Asia. This entailed identifying the best Asian location to distribute from to serve its Asian markets; in order to maintain customer service levels while reducing shipping costs and reducing overall inventory levels.
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Industry: Manufacturing, Wholesale, Distribution, Retail
Project: Asian Logistics Network Optimisation
Company: Company specialising global cosmetics manufacturing and distribution
Issues: Logistics network challenges experienced in Asia with individual shipments, shipping LCLs (less than container loads), excessive safety stock throughout the network, service levels, Asian logistics operations and arrangements, international trade complications, 3PL requirements and distribution.
Key requirements: To assist the Global Cosmetics Company to identify solutions to optimise its logistics networks in Asia.
“LSC Solutions identified a logistics solution that optimises our Asian market which presents the least risk. The solution reduces safety stock within our Asian supply chains, optimises container loads from Australia to the Asian marketplace, and will allow us to meet customer service levels across Asia” said Head of Supply Chain, Global Cosmetics Company.
The outcome: Identified an optimal logistics solution and location to establish a third party warehouse hub in Asia that would reduce safety stock within Asian supply chains, optimise container loads from Australia to the Asian marketplace, and allow customer service levels across Asia to be met.
What we did:
- Current State Review:
- Conducted a current state review of the Company’s Asian logistics network, in consideration of the Company’s strategic goals for the Asian market.
- Reviewed the Company’s Asian logistics network, warehousing arrangements, product flow and product demand from Asian markets, service level requirements and current warehouse throughput at each warehouse location in Asia.
- Conducted data analysis.
- Future State Options Analysis:
- Analysed expected demand growth for Asian market and projected future volumes; identified dominant markets; reviewed container loads; reviewed service level requirements; reviewed freight options and impact.
- Conducted ABC Analysis to identify profitable fast moving products and identified slow movers.
- Researched, designed and evaluated future state options to optimise the Company’s Asian logistics network.
- Reviewed suitable port options and level of service implications.
- Identified and considered inventory holding requirements, cost drivers and implications.
- Identified logistics options for smaller Asian markets.
- Considered used-by dates and customer shelf-life requirements.
- Developed strategy for slow moving product.
- Made recommendations to maintain service levels to Asian markets.
- Developed indicative logistics costs per option; identified risks and issues; reviewed trading constraints; outlined logistics requirements.
- Identified scalable options that would optimise the Company’s logistics networks in Asia, considering strategic goals and expected growth.
- Optimal Logistics Solution: Presented options to management including evaluation and optimal logistics solution to establish a third party warehouse hub in Asia that would reduce safety stock within Asian supply chains, optimise container loads from Australia to the Asian marketplace, and allow customer service levels across Asia to be met. This provided the Global Cosmetics Company with the justification required to pursue the logistics network solution in alignment with strategic plans.
- Next Steps: Defined next steps to pursue the selected logistics solution.