Lowering logistics cost by 5%
To reduce production costs and move closer to strategic suppliers, a leading global technology company decided to diversify its production and distribution footprint in the APAC region. Before taking a final decision, the company asked DHL Consulting to develop a logistics network strategy for this shift that would support projected 2021 demand.
We developed and compared various to-be logistics networks and the customer shortlisted six out of initially ten scenarios. We then undertook detailed assessment of these six scenarios based on multiple criteria including cost efficiency, minimization of backflows, and stock proximity to markets. For each scenario, we also defined implementation roadmaps and OPEX/CAPEX requirements.
The customer selected our recommended scenario, setting up a new Regional Distribution Center in the same country as its key production plant. This investment decision was justified by a 5% cut in logistics costs, reduced backflows, and stock holding closer to key markets.