Expectations fulfilled: Transforming a CPG鈥檚 supply chain
How 乐鱼（Leyu）体育官网 used advanced data and analytics to optimize a complex distribution network and deliver on demand
Client
Leading CPG company
Primary Goal
Optimize US supply chain and improve last-mile delivery (timing, costs, operations)
Industry
Consumer and retail goods
Technology
Coupa Supply Chain Guru, Tableau
Staying ahead of customer preferences can feel like trying to hit a moving target鈥攁nd especially as today鈥檚 on-demand consumers expect their must-have-now products to move even faster. For our client, a leading consumer packaged goods (CPG) company, managing that demand and consistently closing last-mile customer delivery were growing challenges. The company鈥檚 multiple brands鈥攔anging from pet foods to personal care products to cleaning supplies鈥攚ere using disparate distribution networks, workflows, and technologies. So 乐鱼（Leyu）体育官网 helped our client make the difference by developing a detailed new roadmap to transform the company鈥檚 US supply chain operations.
KEY OUTCOMES
Making a measurable difference
- Five strategic roadmap options, with detailed scenarios, impact analyses, and recommendations
- 99 percent of delivery goal, including 69 percent within one day and 30 percent within two days
- Dynamic new efficiencies via consolidated distribution centers and more centralized tech and operations
- $9.4 million forecast savings in fulfillment costs over five years
Client transformation journey
Click on each part of the journey to learn more about our client鈥檚 transformation.
The 乐鱼（Leyu）体育官网 four-phase approach to transform a complex CPG supply chain
Our client engaged the 乐鱼（Leyu）体育官网 Supply Chain and Logistics Advisory team on a six-month project beginning in March 2022 to provide (1) a thorough analysis of its US supply chain operations and (2) a set of options to enhance and optimize those operations. The 乐鱼（Leyu）体育官网 team included three to six resources over the project鈥檚 four phases.
Phase 1: Network costs and operations
The first step was an initial discovery process to get a complete snapshot of the current-state distribution network鈥攃osts, operating processes, number of locations, differences by locations, delivery timelines, and more. Work included:
- Interviews with key stakeholders
- Data collection and analysis (Supply Chain Guru, Tableau, spreadsheet analytics)
- Baseline costs by locations and across the network
- Operational processes.
Phase 2: Network and brand analyses
Because our client鈥檚 distribution network was highly influenced by its unique brand operations, it was important to look next at how and why things were different鈥攁nd where the brands might work better together. Key steps included examining:
- Distribution locations, space, and operations by brand
- Third-party logistics providers
- Expected last-mile delivery windows and actual fulfillment timelines
- Small parcel shipping needs, whether to home, office, or retail
- Relevant technology systems, including procurement platforms, warehouse management systems, and ERPs.
Phase 3: Scenario analyses
From the start, a key goal was to develop multiple optimization scenarios and their related business cases so that the client could evaluate the impact of any changes鈥攑otential benefits and cost efficiencies versus the associated level of effort and operational risks. 乐鱼（Leyu）体育官网 developed five scenarios, forecasted over a five-year period and compared to the company鈥檚 current as-is supply chain: The scenarios, from least-impactful to most-impactful, were:
- Option 1: Optimize skin health products鈥攖hree brands in four locations
- Option 2: Optimize home, personal, and oral care products鈥攆ive brands in four locations
- Option 3: Optimize pet/veterinary (largest brand by distribution freight and complexity)
- Option 4: Optimize all brands except pet/veterinary
- Option 5: Optimize all brands.
Phase 4: Business case and strategic roadmap
In the end, the risk-reward case for our client of a full supply chain reset was compelling, especially as it became clearer that there were growing risks to not making changes to an increasingly inefficient distribution network. With the new plan, the company could reduce its supply chain costs while adding more capacity, streamline redundant workflows and disparate technologies, better leverage warehouse space at each location, and, perhaps most important, guarantee the now standard expectation of at least two-day fulfillment across 99 percent of its customer base. Among the key steps:
- Consolidate more than 30 distribution centers down to 7 locations, largely driven by the pet foods distribution footprint
- Retain and utilize pet/veterinary mixing centers and their fulfillment capabilities
- Consolidate skin, home, personal, and oral care products into three of the seven facilities
- Integrate and transform current tech stack to enable last-mile delivery execution and fulfillment
- Consolidate small parcel operations into one centrally managed organization and governance structure, and implement small parcel operating model practices to standardize last-mile processes and systems
- Renegotiate third-party carrier contracts to leverage scale
- Total estimated savings: $7.4 million to $9.4 million over five years
The road(s) to transformation
Meaningful change is rarely achieved by following a single path forward鈥攁 one-way, nonstop ticket to 鈥渟omewhere better.鈥� In today鈥檚 agile world, our 乐鱼（Leyu）体育官网 teams have observed that, more often than not, organizations greatly benefit from evaluating transformation initiatives across a range of scenarios, with at least some learnings and recommendations from each scenario often coming into play as the project progresses.
This 鈥減lanning is everything鈥� approach allows company leaders to fully understand the benefits, risks, and level of effort at all points of the potential journey. And while that journey may even take a few turns along the way, with the right scenario-planning up front, you鈥檒l never be surprised by any change in direction. It鈥檚 all part of the well-planned ride.
Meet the team that made the difference for a leading CPG company
How complex is your supply chain and distribution network? Is it ready for the next five years, and the inevitable shifts in your customers鈥� needs, preferences, and expectations? Please reach out to us if we can help you think about the new and emerging options to optimize your supply chain and logistics operations. 乐鱼（Leyu）体育官网. Make the Difference.
Mary J. Rollman
Principal, Supply Chain Leader, 乐鱼（Leyu）体育官网 US
Jeffrey Meil
Director Advisory, 乐鱼（Leyu）体育官网 US
Mary J. Rollman
Principal, Supply Chain Leader, 乐鱼（Leyu）体育官网 US
Jeffrey Meil
Director Advisory, 乐鱼（Leyu）体育官网 US
Global CPG transformation
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