Distribution Network Strategy

Summary

LCP has been retained on multiple occasions throughout this period to undertake network strategy, inventory analysis and operational due diligence (audits) to help optimise the operating cost base.

Project Background

This low cost high street retailer needed to drastically improve its high street store service whilst reduce its operating cost base. LCP was engaged to develop a radical supply chain transformation strategy.

Approach

This major project required the deployment of a relatively large team from LCP over a prolonged period of time, representing many disciplines, namely:
- strategy development; analysis; DC design; contracting; programme management; engineer to contract

LCP defined a heavily prescribed programme with intense project management, stringent adherence to milestones and evaluation at each Go / No Go decision point. The major activities where:
• Review existing network operations (warehousing, store delivery, transportation) and identify the causes for poor service and opportunities to improve operations / reduce the cost base
• Having determined to close 3 Distribution Centres and open a purpose built automated DC - undertake the design, contracting of build and implementation
• Prepare and manage a comprehensive tendering process with 4 major LSPs to identify a single provider to run the whole network
• Undertake the evaluation of tenders (with the Client) and prepared a recommendation for Board approval
• Develop the closure and business migration plan
• Participate in the Business Systems Design
• Responsible for defining Supply Chain systems functionality
• Programme manage the delivery of the new automated DC
• Facilitated and acted as the 'Expert' during Union negotiations
• Key advisors in the design and letting of a Third Party Contract.

Client Testimonials

LCP has enjoyed a very long standing relationship (over a decade) with this High Street and Catalogue/Internet Based Retailer.

Success Factors

This was a ground breaking network change, introducing the first Fully Automated Distribution Centre, stockless operation, into the UK.

LCP, along with the Client and Third Party team, were able to deliver this major project on time and within budget.

This project was undertaken at the same time the Client was implementing a new Retail Management System, which would inevitably have to interface with the supply chain solution - introducing further levels of complexity.

Results and Benefits

Even during a difficult period of trading the projected benefits were delivered:
• LCP took this Client from Concept, through Detailed Design and onto fully managed Implementation
• Operating cost reduction circa 30%
• Network simplification with hidden benefits for both suppliers and Client alike (genuine win-win)
• Fully automated Distribution Centre designed and implemented to time and budget
• Transport optimisation - including the forerunner of reverse logistics and a profit generating backhaul programme (which simultaneously reduced supplier costs)
• Complete systems definition for supply chain operations - planning, warehousing, in-take planning, transport management
• The first UK stockless clothing retail operation
• Enhanced control of overseas inbound goods
• Improved stock on-shelf availability and substantially reduced store task time (estimated at a 70% saving) with greater emphasis on serving customers on the shop floor.