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Logistics and Distribution

Just-in-time help for over-stressed supply chains


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Businesses that reduced production and inventory because of high oil prices and the global economic cycle have worked to build them back up again. And they are now seeking to grow for the future by diversifying product mix and channels and capturing share in emerging markets. But more is only part of the answer. You also need better. Better visibility. Better agility. Better differentiation. New customer patterns are changing the way supply and demand fluctuates, and it’s never been more important to get what you need where it’s needed at exactly the right time.

Senior executives come to us for help improving the logistics and distribution performance of their companies. We have the second largest Strategy & Operations practice in the U.S. and deliver a broad range of supply chain services across Plan, Source, Make and Deliver. Our global network provides reach on complex issues. We can assist clients on developing a supply chain distribution strategy including current and future state scenarios; determine the voice of the customer; model distribution network and product flows; define the corresponding business case, financial and operational requirements, and put forward an implementation road map. Improving performance in supply chain logistics and distribution requires a combination of innovative thinking, and realistic and precise execution. Learn more about the offering.

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Meet Our People

  • Joe Fantasia, Director, Deloitte Consulting LLP
  • Eugene Long, Director, Deloitte Consulting LLP
  • Jim Harms, Director, Deloitte Consulting LLP
  • Michael Nayden, Director, Deloitte Consulting LLP

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Learn More About the Offering

An end-to-end view of your changing priorities
The answer is logistics, but not the logistics you grew up with. Today, maximum efficiency means having not one supply chain, but a distinct path for every item you track. It also requires a broad view that breaks down operational silos, because the money you spend in one area might produce its only measurable return in another. It requires turning increased lead times, uncertainty and risk to your advantage by doing it better than others. It also means being able to address fuel efficiency and carbon footprint requirements for sustainability.

What keeps many companies from living these new realities is an incomplete understanding of customer requirements, limited planning and forecasting abilities, and a lack of ability to raise logistics and distribution as a c-suite priority. By making improved customer service and bottom-line value key priorities, companies can reengineer their supply chains for both efficient and effective services delivery. But it’s not as simple as it sounds.

How We Can Help

Senior executives come to us for help improving the logistics and distribution performance of their companies. We have the second largest Strategy & Operations practice in the U.S. and deliver a broad range of supply chain services across Plan, Source, Make and Deliver. Our global network provides reach on complex issues. We can assist clients on developing a supply chain distribution strategy including current and future state scenarios; determine the voice of the customer; model distribution network and product flows; define the corresponding business case, financial and operational requirements, and put forward an implementation road map. Improving performance in supply chain logistics and distribution requires a combination of innovative thinking, and realistic and precise execution.

Deloitte helps companies work through these challenges by providing services in the following areas:

  • Logistics strategy
  • Distribution network strategy
  • Distribution operations improvement
  • Transportation management and carrier negotiations
  • Inventory management optimization and deployment
  • Warehouse and transportation management systems evaluation and implementation support

Bottom-line Benefits

Companies that enact change will position themselves to realize true bottom-line benefits, which typically include a 10 to 20 percent cost reduction. We help our clients generate benefits such as:

  • Reduced distribution and transportation costs and carbon footprints
  • Gained focus on product movement patterns vs. mere cost containment
  • Enhanced end-to-end supply chain visibility from logistics and transportation costs to goods in transit
  • Improved customer loyalty by focusing supply chain distribution strategy on the customer’s service objectives
  • Increased in-stock position and decreased total inventory by building a process that more accurately reflects supply and demand trends

Four Ways to Get More Value Now

We have helped some of the world’s largest companies redefine their distribution network strategies by addressing challenges like global expansion, changing market demand and fluctuating petroleum costs. Here are some of the key lessons we’ve learned along the way:

Take an end-to-end view. After objectives and priorities are established, examine your company’s supply and demand to determine how all of the components of the network can be integrated. Look beyond your current model and consider how enterprise value can be driven through optimization of the existing distribution network.

Don’t try to make one size fit all. Logistics processes and supporting systems that worked in the past may not be right going forward. Customer requirements are usually unique and dynamic; supplier locations are now global, and product attributes call for extreme flexibility in distribution. Maintaining the status quo is asking for trouble – particularly trouble from competitors who are already moving in this direction.

Be both customer and environmentally friendly. Meeting specific customer service requirements around products and services can help grow market share by maintaining strong existing relationships and growing new ones. The ability to plan and execute the movement of the right product to the right place at the right time can also make the supply chain greener by significantly reducing expedited freight and the production and repositioning of unneeded inventory. Develop strategies that enable efficient flow of finished goods to their point of consumption at the lowest total delivered cost per unit with the least environmental impact.

Look beyond technology. When implementing new technology, conduct a rigorous analysis of logistics strategies and core distribution processes. Replacing inefficient and broken processes with new technology will only serve to magnify the degree of inefficiency. Outline the business requirements the technology investment must support – instead of building a logistics and distribution business around the technological capability.

Logistics and Distribution in Action

  • A multi-billion-dollar global consumer products retailer faced drastic changes in in-store product mixes over a 3-year period. Deloitte helped conduct a strategic assessment of the company’s North America supply chain. Numerous opportunities were identified to reduce overall cycle time and investment in fixed assets. By moving to satellite distribution centers operated by third party specialists and creating a scalable, flexible network, overall operating costs were reduced by almost $9 million (nearly 10 percent) and inventory investment was lowered by 72 percent.
  • A rapidly growing international biotechnology company was concerned that increasingly complex distribution could put commercial growth – and patient health – at risk. Deloitte helped the company evaluate its Latin American distribution network and benchmarked it against biotechs’ regional distribution operations. The company could improve cold chain distribution by using active packaging and shipping, and reduce intercontinental cold chain routes from over 30 to 4. Opportunities for over $2 million in cost savings were identified, along with ways to mitigate the risk of multi-million dollar penalties for poor distribution performance.
  • A top global industrial equipment manufacturer forecast significant market growth in Asia Pacific over five years. Deloitte helped develop a regional transportation and logistics strategy to support the company’s aggressive expansion plans in Japan, China, India, Singapore, Indonesia and other markets. We helped provide materials flow map in and out of Asia Pacific for current and 2015 states; identify almost $80 million in cost saving opportunities by 2015, and develop a strategic roadmap for attaining the opportunities.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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