Major supply chain cost reductions: DHL Consulting instrumental in supporting one of the world’s largest manufacturers of power generation turbines.
Our Unique Approach: Strategy Meets Operational Excellence
As a trusted, neutral advisor backed by DHL Group’s deep logistics expertise, DHLC is uniquely positioned to bridge the gap between strategy and execution.
By leveraging these strengths, we developed a structured, two-phase approach that enabled our client to optimize its global tooling supply chain while securing long-term service excellence.
The client is a globally leading turbine manufacturer as well as maintenance, repair, and overhaul (MRO) provider for the power generation industry, providing tools ranging from small-value items such as wrenches to large-value items like power generators and specialized, custom-built tools.
The company was committed to achieving aggressive global cost savings without compromising service levels. However, they faced significant challenges due to a multitude of factors that needed to be considered in their global supply chain. At the same time, their own team had limited internal supply chain expertise; such a supply chain transformation was understandably not a core skill for the engineering and service organization.
However, with over 40% of operational expenses stemming from logistics and operations, these issues demanded immediate attention.
DHL Consulting contributed exactly the right complementary skills in complex supply chain transformation to this project as we partnered with the client to optimize their tooling supply chain operations. By adopting a structured approach, a number of key improvement opportunities were identified, prioritized, and planned in detail – delivering substantial savings and enhanced operational readiness.
Client
A globally leading manufacturer and MRO provider for the power generation industry
Task
To achieve major cost savings on a global scale while maintaining high service levels
Results
Delivered annual cost savings of nearly 10% and improved operational readiness for the long term
Team
One dedicated project manager, one supply chain expert, and two dedicated (senior) management consultants. Within the scope of this particular project, we staffed the team across different DHL Consulting offices to find the right balance of local expertise and functional experience.
For the duration of the project, the team came together in the USA, also for many joint workshops and working sessions on site at the client’s premises, including visits to the client’s operations.
Under pressure from top management to optimize costs, the client sought out DHL Consulting for the consulting company’s expertise in streamlining supply chain operations on a global scale.
The client follows a clear readiness-to-serve mindset crucial to their success. Because the downtime of power plants results in extremely high costs, tooling deliveries must be fast and efficient to avoid delays in maintenance and repair operations on site.
DHL Consulting worked under these premises to optimize the operating model, which consists of:
1. Purchasing or renting tools from suppliers
2. Storing tools at 30+ tooling centers (warehouses) spread across 20+ countries
3. Shipping tools from tooling centers to and from customers’ sites
4. Maintaining tools between jobs
All efforts to streamline operations had resulted in savings, but these efforts fell short of achieving the ambitious financial objectives and did not address all areas in a structured manner. A detailed and accurate business case, with granular operational feasibility testing, was required. Followed by a coordinated implementation plan spanning all 30+ tooling centers.
Furthermore, clear communication was essential to secure client buy-in and ownership for the initiatives.
The four-person team set out to assess the operations and generate clear initiatives for improvement.
DHL Consulting put together a four-person team consisting of one project manager, one supply chain expert, and two senior management consultants. They represented various nationalities – from the USA to Singapore – to contribute a global perspective to each task at hand.
Leveraging their experience across the different facets of supply chain improvement, the team immediately got to work. Their know-how in strategy definition, target operating models, logistics network design, and operational optimization meant the team optimally matched the client’s wide-ranging supply chain transformation requirements.
Over the course of the project, they frequently conducted both on-site and remote work, which included four site visits and over ten key meetings and discussions with the client. The team members also conducted over 25 internal and external interviews with experts, allowing the experts to gather best practices from industry peers and other relevant industries.
On the client side, project owners were mostly based in the USA, yet also harnessed the company’s expertise globally from Europe, Asia, and Latin America.
“DHL Consulting’s structured approach and deep operational insights have set us on a clear path to achieve significant cost savings and operational improvements .” – Client, Head of Procurement
The team of DHL Consulting experts divided the project into two phases:
This allowed the team to systematically move forward, initially defining and prioritizing improvement levers by means of:
The outcomes resulted in the selection of many various initiatives, which were developed in conjunction with the client’s operations team. Each initiative was designed to provide transparency for informed, clear communication and decision-making:
To support the client in gaining budget approval, DHL Consulting also presented the key outcomes of the team’s efforts to the company’s top management.
The information gained from the analysis, modeling, and workshop activities led to the identification and prioritization of six cost-reduction levers:
Detailed business case assessments and 18-month implementation plans for each were also developed. At the same time, to drive the execution of the roadmaps, client-side ownership of each initiative was defined
“This project showcases our ability to drive impactful change by combining strategic planning with operational excellence. The identified savings and improvements will significantly enhance the client’s competitive edge while laying the groundwork for long-term success.”
– Alexander Schuett, Head of SLC Practice
Each initiative had a positive return on investment (ROI) against the company’s internal objectives, with some achieving break-even after just six months.
This project showcases our ability to drive impactful change by combining strategic planning with operational excellence. The identified savings and improvements will significantly enhance the client’s competitive edge while laying the groundwork for long-term success.
The collaboration between the client and DHL Consulting showed that by combining a long-term strategy with detailed operational feasibility, actionable recommendations can be developed with clear, immediate next steps for starting the transformation work. This enables companies to move forward with transparency and achieve ambitious targets that would otherwise not be possible through continuing on the path of the status quo.
What’s more, when teams are able to transfer their knowledge and when capacity is built up within an organization, sustainable supply chain optimization can be achieved.
At DHL Consulting, we specialize in turning logistics complexity into a competitive advantage. As part of DHL Group, we combine hands-on industry expertise with independent, neutral advisory services to drive real results.
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