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 SGS-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 with SGS-Maine Pointe:

• Transform their internal culture andoperating 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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