A major US athletic footwear manufacturer had consolidated their European
operations and needed to consider what, if any, changes they needed to make to their
warehousing and distribution arrangements to maximise the benefits from the re-structure.
A major issue was whether to consolidate some, or all, of the warehousing operations into a
single operation and if so how best to do it.
The overall marketing strategy of EMEA was built around the objective of developing
a high value brand. This needed to be supported by a high quality logistics service to
Market considerations in each country had to be reviewed as well as the cultural
factors; e.g. the reaction of customers in France receiving shipments from a
warehouse in another country. How would this effect the image of the French
The requirements in each territory differed; order to delivery cycle, average order
sizes, special requirements all needed to be taken into account.
The feasibility of actually being able to deliver the required service and at what
cost needed to be determined.
The effect of possible future consolidation of customers within Europe (driven by
the single market) had to be assessed.
The potential implications of the adoption of the euro had to be considered.
In order to proceed the following process was adopted:
Analyse each individual countries’ current requirements and their peculiarities.
To look at the feasibility of the current operations to fulfil the requirements
and the associated costs to deliver the service utilising the existing operations.
Identify potential warehousing contractors and get them to submit fully costed proposals
for a phased implementation of a central European warehouse.
Attempt to identify haulage contractors who could deliver the required level of service
throughout Europe. It was found that no single contractor was able to fulfil all of the
requirements in every territory, so contractors were identified who could operate with
individual countries or areas within Europe. They were invited to submit fully costed
proposals to undertake the physical distribution operations.
By consultation with the Country Managers and the Commercial Director, attempt to
project the requirements over a five year horizon.
Review physical operational requirements over a five-year time horizon, revert to the
potential warehousing and distribution contractors and re-cost.
Select the warehousing contractor and the five distribution contractors.
Put together an implementation plan, which involved moving France, Benelux, UK and
Germany into an existing facility, until a new build was completed.
Make recommendation and sell to the business.
Design the new warehouse in conjunction with the selected contractor and oversee the
construction and fitting out.
Negotiate and agree contracts with the Warehousing Contractor.
Become a leader in the selection of systems to run the warehouse.
Execute the implementation plan, whilst planning the move from the start up warehouse
to the new warehouse together with the migration of the remaining operations to
the central warehouse.
The project was reviewed one year after implementation and was felt by all
of the Country Managers to be a success.
Savings equated to £1 million in a full year.
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