A fast-growing new product category posed major challenges for a large multinational, experiencing highly volatile customer demand in Europe, with long, inflexible order fulfilment lead times from 3rd party manufacturers in the Far East. The impact included high levels of inventory of the ‘wrong’ product variants – costing millions to write-off, and supply shortages of the ‘right’ product variants – costing revenue, market share and brand reputational damage from lost sales.

Assess the supply chain and provide a solution to improve customer responsiveness and overall inventory management.

After a detailed assessment of the product and supply chain characteristics, we designed and implemented an innovative supply chain segmentation solution: a packaging postponement hub in Europe. It required minor changes to product design and significant changes to the operating model, to enable late stage customisation without significant cost and inventory increases.

The project delivered 70% faster order fulfilment time, £10 million cost avoidance, £1 million annual freight savings (offsetting the increased postponement cost), 75% reduction in carbon emissions, and net reduction in total network inventory!