Case - E-Commerce

E-commerce consulting helps manufacturer streamline sales

Appliance maker to expand market presence through new online and retail shops

One of the leading television and home appliance manufacturers in China was seeking to transform its business model by leveraging e-commerce. The idea was to move beyond traditional product manufacturing and become a global multimedia technology company, selling self-branded products through its own retail channels.

 Case study overview

Challenge

Changing times – moving from pure manufacturing to clicks-and-bricks retailing

The home appliance market in China has undergone rapid change over the past decade. Today, market demand is reaching saturation, products are commoditizing and price competition is intensifying. Traditional TV and home appliance companies are facing significant cost pressures. At the same time, consumers are demanding more variety and the flexibility from retailers.
As a result, one forward-thinking manufacturer decided to undertake a strategic business transformation. The keystone in this new structure was to be the implementation of an internet-based retail platform. In addition, a network of brick-and-mortar stores would be developed, and all sales and distribution channels restructured.
This also meant that the company needed to examine the implications of the transformation for their supply chain, as well as refine their logistics to fit the new strategy. And for that, they needed expert assistance.

Team

Adding it up – expert professionals + specialized knowledge = business transformation

In order to best support this international company in realizing their ambitious goals, DHL Consulting assembled a team of both local and international e-commerce consulting experts.

The team consisted of six members, all highly skilled in various technical aspects of supply chain management. They were based at the client’s offices for nearly four months – working just next door to the office of the head of the supply chain.

National market expertise was ensured through the participation of team-members from Shanghai and Shenzhen, while the international perspective was further covered by consultants from Singapore and Bonn. In total, the team represented five different nationalities: Chinese, Singaporean, Indian, German and Dutch.

Approach

Distilling knowledge – turning client input into a powerful tool

As part of the project, the client wanted the answer to three questions. First, they needed  to understand how to further enhance the customer shopping experience. Second, they needed an e-commerce consultant to recommend a logistics service model for their planned e-commerce activities. Third, they needed a correct estimate of the resulting financial impact of their new strategy.
Based on these issues, the e-commerce-savvy consultants  decided upon a three-phased approach. First, a strategy assessment evaluated the current operational status, key priorities and challenges, thereby defining and assessing potential strategic options. The team then analyzed global industry trends in e-commerce, taking a number of operating models into consideration.
Preparations made, the team moved on to designing the supply chain. In this final stage, DHL Consulting and the client defined a new strategy, redesigning operational processes to enhance both efficiency and customer experience. The financial impact was also evaluated; including which investments would be necessary to meet the client’s strategic goals.
DHL Consulting is currently running a pilot project in Beijing in accordance with the finished plan. Meanwhile, the client is planning for a nationwide rollout in the near future.

Results

Modus operandi – innovating a methodology of logistics analysis

The DHL Consulting team designed a new supply chain analysis methodology. It helped the client to evaluate the best strategic options for an e-commerce transformation over the next five years. In the process, our e-commerce consultants also developed a comprehensive understanding of the market dynamics, challenges and opportunities facing retail and e-commerce businesses in China today.

Lessons Learned

One of a kind – every supply chain requires a unique solution

Business transformation is hard work. Doing it right requires close collaboration between management and affected employees with the experts who have the knowledge and experience. Together, the most viable solution to the business challenge can be developed.
Every supply chain is unique: in its size, its markets, orientation and in the products it delivers. For instance, a retail supply chain operates very differently than a manufacturing-oriented supply chain. The requirements are different, and customer expectations of a particular character.
Unique solutions deliver successful results.

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