CASE STUDY

Fulfilment, Logistics and Supply Chain

Our client is a global distributor of FMCG, with strong presence in Asia, managing a 60+ brands portfolio and participating across the value chain (from sales & merchandising to supply chain management). Our client launched a programme in December 2018 to turnaround flat top line growth and declining profitability over the last 6 years.

Warehousing and transportation were identified as one of the largest opportunity areas to reduce cost to serve and drive profitability improvement in Southeast Asia. They also identified a bottleneck in Procurement due to stretched resources

External support was required to accelerate execution to maximise in-year uplift.

Bain & Company initially developed a transport category strategy and sourcing approach, and secured stakeholders’ alignment on approach and target outcome from re-tendering initiative. After orchestrating the initial launch of an RFI process to gather input on new transporters, Bain enrolled ArcBlue to draw on deep 3PL experience, to drive the end-to-end strategic sourcing process and to lock-in savings.

ArcBlue led a rapid sourcing event with incumbent providers to generate quick wins. ArcBlue drafted RFP documentation and orchestrated the RFP process, establishing clear technical and commercial evaluation criteria. Following initial evaluation, ArcBlue defined negotiation tactics and led commercial negotiations. Post award, ArcBlue identified key risks and enabled activities to transition smoothly to new contractors.

With ArcBlue’s support, our client was able to consolidate the number of 3PL primary transporters from 17 to 10, reducing operational complexity and optimising efficiency, whilst tightening service levels and improving compliance. The external support accelerated execution to at least ~3 months/ 50% faster compared to internally driven process.

ArcBlue achieved a run rate EBIT savings of ~13-15% against total annualized transportation costs and a 30-50% outperformance of the initial target (10%).

ArcBlue identified further value opportunities in the warehousing pick and pack operations.

Need help to identify & deliver savings?

ArcBlue’s Savings & Opportunities programs follow a structured methodology beginning with cleansing and categorising spend data and finishing with benefits realisation and reporting. We provide embedded teams to work with the client to fully understand and cleanse data and to create opportunity dashboards to visualise and prioritise opportunities. We then work with key stakeholder groups to validate the opportunity before creating a ‘wave plan’ to drive savings through the organisation.

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