A story of how Maersk’s supply chain management solutions helped a retailer save more than USD 2.5 million
The customer
Our customer is a leading high-end furnishing and kitchenware retailer in the United States. The company, with its wide range of operations, has its footprint spread across the globe.
The challenge
In an increasingly competitive domestic market, our customer continued to face difficulties with improving the productivity of their logistics processes.
Multiple touch-points gave rise to sub-optimal consolidation, which in turn led to a spike in transit times, transportation, and warehousing costs.
The challenges included
- Developing an integrated supply chain solution for their inbound supply to achieve cost savings.
- Finding the right decision tree that could forecast the cargo mix for consolidation at the origin.
- Streamlining inbound logistics operations to better fit delivery schedules and reducing touch-points when necessary.
The Maersk solution
By working closely with the customer, Maersk’s team of experts evaluated the current and optimal supply routes. This comparison gave way to a guideline which helped to optimize container utilization, thereby bringing down their count.
The solution was centered around transforming a destination-based supply process to an origin-based supply process. Maersk, through a cyclic review of the supply chain, designed a solution to track deviations at all key touch-points and determine the right cargo ratio for all inbound cargo flows.
The key areas the solution focused on were
- Finding the correct levels of minimum threshold of cargo at container freight stations at the origin.
- Determining the amount of cargo produced at the vendor’s side and aligning delivery schedules from the origin.
- Determining separate packaging and logistics strategies for direct shipping and shipping made via distribution centers.
- Conducting historical analysis of cargo shippers with regard to deviations in delivery times, allowing us to predict future patterns.
The result
As a direct result of the Maersk supply chain management tool, the retailer saw significant reductions in logistics and handling costs. The solution also enhanced order and supplier management processes to allow more accurate planning and faster shipping.
The customer was able to reimagine retail with
- More than USD 2.5 million in overall savings.
- Better packaging at the origin, which led to the use of around 1000 fewer containers.
- Reduction in overall customs entries with a faster clearance process.
- Efficiency in transit time from origin to destination.
- Opportunity to drive better control through direct shipping in select processes.
Flexibility to shape your retail supply chain
The integration of ocean and logistics services provides us with a unique advantage - the flexibility to tailor solutions according to your needs for both single products and product bundles. This includes finding different ways of transportation and alternative routes to handle supply chain disruptions if needed.
To determine which option will be the most effective for your business, contact us.
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