The company had a number of problems firstly distribution costs were perceived as high, secondly customer service was perceived as too low and thirdly they were running out of manufacturing capacity.
Action
A distribution network design study and a manufacturing network design study were undertaken.
Result
A recommendation was made for additional warehousing which would mean less long trips in small trucks and hence reduce costs, this would also allow an increase in distribution reach and customer service. With regard to manufacturing capacity, a contract was set up with a third party in a key location. This avoided significant capital expenditure and also had the advantage that any competition could not make use of this spare third party capacity.
