Transforming with new disruptive business models (CS184)

This family-owned, billion-dollar omnichannel mail order and electronic retail company was facing significant headwinds from new disruptive business models.

Operating in a world of declining sales and shifting margins, executives recognized that their future existence was under threat. With a business model that was rapidly becoming obsolete due to changing buyer behavior, the company engaged Maine Pointe to help optimize the supply chain, streamline the organization and solve the problems of excess inventory, SKU proliferation, and above-market freight and warehousing costs.

Crucially, they wanted to achieve this without reducing headcount or bricks and mortar. Our analysis showed that the organization had poor cost control, weak cross-functional alignment and lacked the necessary tools to harness the vast amount of data at its disposal. These, along with a widespread reluctance to change the current ‘culture of consensus’ were contributing to a situation that, if not quickly improved, could prove detrimental to the business.

The Results:

• Transform their internal culture and operating model
• Drive accountability into the organization through strategic job design and results-based performance metrics
• Reduce cycle time by 15%
• Decrease working capital by 25%
• Implement market leading data analytics to enhance visibility, improve control and optimize inventory levels
• Reduce logistics spend by 7-12%
• Deliver >10% savings on prior year purchases with a clear strategy to generate further year-on-year savings
• Reduce small parcel and domestic trucking costs by >5%
• Improve variable warehousing costs by 10%lSave tens of millions of dollars in procurement costs
• Achieve a 5:1 ROI

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