From North America to Asia, find out how DHL Consulting transitioned a major corporation’s supply chain through the creation of an internal 4PL organization.
Due to several acquisitions of well-known fashion labels over the course of just a few years, our client established an overarching holding structure to manage the various independent fashion brands. This holding then had the responsibility to act as an internal service provider – supporting transactional activities with the aim to increase efficiency, realize cost savings and optimize supply chain performance.
Eventually, the existing logistics activities and operations of the brands under the holding were to be integrated and partially merged – which brought DHL Consulting onto the scene. The DHL Consulting team assisted the global luxury fashion holding in revamping their supply chain operational model, significantly boosting transparency of and control over the multi-brand and multi-level supply chain.
Client
A global luxury fashion holding
Task
To build an internal 4PL setup to manage the multi-brand and multi-level supply chain
Results
More than 120 processes standardized and optimized across multiple domains and regions, with a new governance structure defined
Team
An international team of four collaborating remotely from three different US states and Singapore
Each of the holding’s independent brands collaborated in matters concerning their supply chain, logistics, and distribution requirements and services – from the factory or warehouse pick-up of the goods to their transport and their delivery to stores, wholesalers, and e-commerce customers. However, this collaboration was underdeveloped, with the brands striving to maintain their independence.
As a neutral party, DHL Consulting was brought in to find solutions both for the business and for change management – taking along all those involved on the transformation journey.
Amid the various systems, locations, brand needs, and business partners, a solution was sought that serves all the needs of the independent brands from one corporate function under the responsibility of the holding. At the same time, the stakeholders within the different areas of the company needed to be fully on board with the proposed changes to ensure a smooth, successful transfer of responsibilities.
DHL Consulting immediately got to work in finding a solution. We put together an international team consisting of the global lead Partner for supply chain projects at DHL Consulting as well as four business and supply chain consultants in Europe. In line with our pledge to support the future of supply chain and logistics competence, we also brought an intern on board.
The DHL Consulting team organized various in-person workshops in different cities across the globe. The aim of the workshops was to identify the supply chain challenges and boost the process of change management during the transition from the traditional supply chain system to an internal 4PL setup.
The team worked together closely with the client’s multinational teams around the world to align the brands’ and the stakeholders’ various needs, requirements, and synergies. These were then taken into account during the 4PL setup process. All along the way, the team brought in the expertise of the wider DHL Group. As DHL also offers 4PL services, our consulting team frequently exchanged ideas to propose optimal solutions from the client’s perspective– a collaboration that is virtually unique in the supply chain consulting industry.
For the global flow of the fashion brands across the client’s complex international supply chain, a fourth-party logistics (4PL) service provider structure was adopted.
Besides the need for process revision, governance, and change management to foster acceptance for the transfer of logistics services from the several brands to the holding, improvement potential in the following areas was identified by DHL Consulting:
The client embarked on a reintegration journey to establish an efficiently performing 4PL structure. This journey was built on four main pillars:
The approach harnessed by DHL Consulting, in close collaboration with the holding and brands, involved the implementation of various measures:
These measures covered multiple domains – from warehousing to international transportation and local transportation to supply chain finance and customs. All in all, it was a comprehensive transformation of the client’s supply chain operating model.
Essential for the success of the transition was making sure the entire team was on board. To achieve this, DHL Consulting set up improved organizational structures and identified talent management issues. As a result, responsibilities were clarified within the holding and brands, and the path was paved for more efficient communication with results-centric collaboration.
Essential to the successful transition to the new operational model was a finely honed review of all existing processes – taking into account potential synergies and redundancies. All in all, when it comes to improving the logistics efficiency within a holding structure, it is beneficial to reintegrate the supply chains of the subsidiary brands with the right degree of centralization. This requires customized consultancy with the right expertise and insights into supply chain operating models to create a tailor-made solution that works in practice.
Furthermore, the importance of governance and steering was not underestimated and accounted for during the transition to the 4PL system. The key roles and responsibilities, along with the required employee engagement, were discussed and clarified to improve communication and make for a smooth process. Change management plays a significant role in any transition, especially for one as complex as involving a holding structure with independent brands.
