A multinational FTSE top10 consumer goods manufacturer faced significant COGS pressures (cost of goods sold). Quick wins were already in place. New projects to reduce supply network costs were incohesive and often contradictory to the central strategic direction, being raised sporadically from various local business units.

Build the company’s central capability to identify supply network losses. Propose a cohesive, centrally managed approach to tracking and implementing relevant projects.

Transformed the company’s Supply Network Design (SND) capability by developing an ecosystem of digitised data and insights, leveraging existing data sources and software. This capability was used to generate a global supply network loss analysis model consisting of three tools, which:

1. Provided a visualisation of manufacturing sources to visualise proximity and trade clustering
2. Identify potential losses in manufacturing and material costs, duty leakages and lead time
3. Simulate alternative sourcing cost comparisons of existing and potential manufacturing sites

The organisational design was assessed to define how to optimally feed the model with relevant data inputs, and how to effectively integrate the outputs into a centrally managed SND programme.

The following key benefits were delivered, resulting in a transformation of the company’s SND capability with substantial group benefits:

1. Identified £40 million of realistic COGS savings through the Supply Network Loss Analysis model, with 10% already locked in within year one
2. Formed a centrally led strategic savings programme with effective governance to ensure relevant stakeholder alignment and ownership
3. Improved the speed of SND / sourcing analysis by 85%, enabling higher productivity and much faster decision-making
4. Transformed the role of the SND team to ‘value creators’ able to predict losses and develop solutions BEFORE mobilising company resources