Case Study: Australian Bathrooms & Kitchens Manufacturer

Cost to Serve / Cost to Serve Optimisation

Background

The company was seeking to understand the cost to service their customer base and identify areas of opportunity to reduce cost.

Challenge

  • Understand the total cost of serving customers and the total delivered cost of each product by customer
  • Highlight the impact of supply chain and other business process costs on the net profitability of sales
  • Deliver margin improvement recommendations for unprofitable customers and reduce high-cost processes / increase profitability

Key Project Outcomes

  • Inventory cost reduction opportunities totalling $7.7m
  • Restructure of distribution model with DC-DC replenishment for major account customers
  • Order and freight consolidation savings of >10%

 

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