Case – Fashion Industry: MADE TO MEASURE – TAILORING BENCHMARK LOGISTICS FOR THE FASHION INDUSTRY
Upgrading a fashion industry supply chain to best-in-class standards of international e-tailing.
Summary: What has been solved?
Our team helped plan a supply chain network that supports the growth targets of a major French fashion company, ensuring best-in-class supply chain performance.
Client
A French fashion company
Task
The development of an optimal supply chain network that meets best-in-class KPIs and enables a strategy of internationalization
Results
Lead times improved by 15%; costs were cut by 22%; carbon emissions were reduced by 40%
Team
4 team members: Project Manager, Senior Consultant, 2 Supply Chain Analysts
Challenge: Preparing a regionally focused supply chain for international expansion
The client, a leading European fashion retailer, faced two key challenges. First, the client had focused purely on its domestic market for years. Under their new expansion strategy this approach started to show severe limitations on its supply chain. Second, years of primarily concentrating on costs had reduced their competitiveness across several key performance indicators, including the time from order to delivery.
DHL Consulting was asked to find a solution that would upgrade their supply chain to a best-in-class level, and give it the flexibility and endurance to empower the company’s internationalization strategy.
Team: An international team brings a global perspective
DHL Consulting set up a team to work closely with the client and create the optimal supply chain network. The team consisted of a Project Manager from Mexico, a Senior Consultant from Germany and two Supply Chain Analysts from India. The client’s Global Head of Supply Chain – who supported the overall process and ensured that DHL Consulting would have full access to any member of the organization in relevant areas such as e-commerce – greatly facilitated the success of the project.
To make things even more interesting, the project was simultaneously carried out at the client’s headquarters in France, and at DHL Consulting offices in Germany and Singapore.
Approach: Making alterations – delivering relief to the supply chain pain points
The first task was to identify the key pain points in the supply chain. One such point of strain was the client’s strong reliance on airfreight, which is too costly for a non-luxury fashion retailer. After identifying all the key areas, we commenced full end-to-end supply chain network optimization, leveraging our state-of-the-art design tools.
First, we looked at optimizing inbound flows, such as determining which ports in China were most favorable for shipping, and defining the best container size to use. We then looked for the most logical location for warehouses and defined adequate size-to-face forecasted demand volumes. Finally, we designed a full distribution network plan, including how often to deliver to stores, and which stores should be served out of which warehouse.
In the end, we delivered an optimal solution for a multi-channel environment, while leveraging the fast growth of the online market and trends like click & collect
Results: Timeless fashion – lower costs, better service, more sustainable
For the client, the project meant moving up the ranks to world-class standards, and preparing to reap the benefits of expected growth. It also significantly reduced expenditure and the company’s carbon footprint.
The results speak for themselves:
- Approximately 15% faster lead times, with 95% of store deliveries arriving within 48 hours of order placement
- Approximately 22% lower costs, via direct shipment to expanding markets and reduced reliance on air freight
- Approximately 40% increase in environmental sustainability, through reduced carbon emissions resulting from more efficient routing and the increased use of sea transport
As consultants, we were extremely gratified when the client followed every one of our recommendations through to implementation. There’s nothing more enjoyable than seeing hard work pay off.
Lessons Learned: Making it fit – working together to fashion a pattern of success
To put it simply, the conclusion reached is that a supply chain transformation like this must engage the entire organization. Doing that encourages and empowers people from across the company – procurement, e-commerce, sales, etc. – to come together to develop a joint vision of how to serve both existing and new customers.
This example shows how end-to-end supply chain optimization can yield multiple benefits. Logistic costs were reduced, and customer service levels were improved.