Ultimately our team created an optimal ‘to-be’ model, which includes a total logistics cost, and tailors distribution to specific segments with similar commercial requirements. These requirements were defined during the project and reflect demand and supply characteristics as well as product type.
Through this segmentation approach, our DHL Consulting team was able to refine cost/service optimization and reveal opportunities for cost reduction. Our deliverables identified levers with the potential to cut distribution costs by nearly 22%, equivalent to savings of approximately €10 million. In addition, the recommended global distribution network can reduce CO2 emissions by 36%.
These significant reductions do not compromise safety or service. According to our customer, “The outcome of the project is without any doubt a very important input and a basis for the future development of the company.” Added to this, the project has served to strengthen the strategic relationship between this organization and DHL. The team continues to collaborate with the customer; currently, this pharmaceutical company is implementing DHL Consulting’s recommendations.
If you would like to discuss optimizing your company’s distribution network, please contact me.