Defining a new logistic model


Client Situation

Our client is one of the leading European perfume and cosmetics producers. They have bought different companies, gaining market share and increasing their brand portfolio, but in order to preserve the independence of the brands they did not make an operational integration.

All the former supply chains remain unchanged. Although luxury brands are businesses with reasonable margins, competition is very tough and increasing, and more and more operational efficiency is a must. On top of this, selective retailing is also undergoing concentration, and perfumery chains as well as duty frees, important players in the sector, are asking for higher service at equal or lower cost.

Approach

With the manufacturing footprint predefined, and the priority in sales and customer service to be given to efficiency, we were engaged to define a new logistic model.

Recommendations

We recommended integrating the supply chains of all the selective brands, with common distribution centres and deliveries. We also proposed unifying the administrative support to logistics and creating a Logistic Service Centre within the Customer Service Centre. Direct delivery from the Distribution Centres to EU customers was defined, avoiding national warehouses.

Results

The logistic costs were reduced by more than 30%, increasing the service level dramatically. The average response time to orders was higher than ten days in the past and now is just 24 hours. Sales were not affected at all by the changes and the satisfaction of our client’s customers with the process was high..