NETWORK RATIONALISATION

Indonesia

Sector

FMCG


Issue

A manufacturer’s service quality and sales growth was being compromised by the capacity constraints of their Java distribution network


Solution

  • Inventory pulled back to a small number of strategically located hubs
  • Hubs deliver Day-1 orders overnight to sales offices for Day-2 delivery
  • Hubs are replenished daily from the DC thru a scheduled transport service

Results

  • 12% lift in product availability for sale
  • 45% reduction in pipeline inventory
  • 6% overall operating cost reduction
  • 100% visibility of retailers’ true demand and distributors’ delivery performance
  • Enhancement of sales team’s relationship with their retail customers (higher product availability and more reliable order fulfillment)
  • An infrastructure that facilitates extended ‘reach’ into more retail outlets