Building a customer-oriented supply chain
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The client
A prominent European manufacturer, belonging to a larger conglomerate, provides its partners across the continent with a comprehensive selection of high-quality corrugated case material products. This organization is dedicated to delivering a full range of solutions to meet diverse packaging needs, ensuring exceptional quality and reliability.
02
Challenges
Our client aimed to improve their competitiveness on the European market by offering better availability of top products at minimum lead time. In addition, a digital sales portal should improve customer interaction and speed up order handling. However, the client lacked readiness to offer standardized products with a clear and reliable service proposition. At that time, there was no actual service differentiation depending on the type of customer and type of product.
Customer-specific products
The products were highly customized, making it practically impossible to stock for different customers, limiting flexibility in the supply chain.
Fragmented product portfolio
The highly fragmented product portfolio prevented the achievement of the critical mass needed for efficient on-stock (make-to-stock (MTS)) production.
Unclear OTIF targets
Since the customer did not measure on-time in-full (OTIF) performance, clear targets for delivery reliability were absent, leading to uncertainty.
Volatile lead times
Due to order bound (make-to-order (MTO)) production and long transportation routes, order lead times were highly volatile.
Limited storage capacity
The distribution network had insufficient storage capacity and warehouse locations were only at or close to production facilities, restricting flexibility.
03
Service provided
We teamed up with supply chain experts and deciders on client side to drive a quick implementation. The roadmap to better competitiveness required that we started to implement concepts as soon as possible.
Figure 1: Clustering example: Simple differentiation between make-to-stock and make-to-order
In the first phase, we focused on two topics: On the one hand, we aggregated customer requirements into clusters to form differentiable service offerings regarding product availability, delivery performance targets and order lead times. The delivery performance target was a particular challenge as there was no clear view on the current performance. During the project, we implemented an OTIF performance monitoring to track and continuously improve service fulfilment.
On the other hand, we reduced the product portfolio. We cut customization options with no/low additional value and defined product standards. The consolidation of the product portfolio led to an aggregation of demand volumes on fewer products. So, we finally had created standardized top selling products which could be produced on stock!
Figure 2: Step-by-step network design approach (illustrative example): 1. optimization of warehouse locations; 2. simulation of warehouse capacities; 3. CO2 footprint reduction.
In the second phase, we conducted a network simulation to select the best-fit distribution network to meet target service levels at optimal cost. In the beginning, we developed some rough examples of different network designs to start the discussion. With each round of feedback, we excluded certain network designs, finetuned others, and detailed out cost metrics to clear the view.
In parallel to the network simulation, we redesigned the order handling and customer demand forecasting processes to fit with the digital sales portal and ensure a seamless customer experience.
04
Benefits
Together with the client, we not only optimized the supply chain but also aligned it with customer needs and expectations:
Structured offers
Our client is now able to differentiate service levels and propose structured service offerings to customers. Each offering has its implication on the client’s supply chain (order handling, forecasting, production strategy (MTS/MTO) etc.). This enhances precision and efficiency of service delivery.
Portfolio optimization
The client achieved a 25% reduction in the product portfolio, streamlining inventory management and reducing complexity through the introduction of new product standards.
Competitive distribution
By implementing a customer-oriented and cost-optimal distribution network, the client boosts their delivery competitiveness in the European market.
Transparent supply chain
The new visibility on key supply chain metrics such as OTIF, forecast accuracy (FCA) supports the client to further improving their service performance.
Efficient communication
By integrating the sales portal into the order handling processes, the client further enhances their customer interaction and satisfaction, while providing seamless and efficient communication channels.
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Customer voice: Hamburger Containerboard
We are happy to showcase this project together with our client Hamburger Containerboard. We have worked on the topics mentioned above in the last two years and we are looking forward to continuing the great work on Hamburger Containerboard’s supply chain!
“TenglerConsulting was a key driver in the fundamental transformation of our supply chain.
Supported by their structured approach and in-depth SC understanding, we were able to take strategic supply chain decisions, define our service offerings und optimize our customer processes.
Now we are ready to upgrade our customer interaction to a state-of-the-art customer portal.”
Peter Kondel
Head of Sales and Supply Chain Manager
Hamburger Containerboard
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Our services
Find out more about our Inventory & Network Optimization, Supply Chain Clustering and Portfolio Management services.