Mail Order Company
SITUATION
Mail order catalog company, in the business of servicing the educational market, engaged The Highland Group to help improve the effectiveness of its supply chain.
DRIVER GOAL
- Increase on-time orders from 68% to 95%.
- Reduce cost per line shipped by 17%, achieving $8 million annualized savings.
RESULT
- Increased on-time orders to 95%.
- Achieved a 4% increase in order completeness without a drop in accuracy.
- On target to achieve reduced cost per line shipped by $8 million.
Case Study
Improve Product Life Cycle & Optimize Profitability
Issue
A mail order catalog company, in the business of servicing the educational market, engaged The Highland Group to help improve the effectiveness of its supply chain.
Highland Approach
The Highland Group conducted an analysis of the supply chain, including a Pareto study of its product lines. The team identified and focused process improvement efforts on the top-producing SKUs. Utilizing a variety of Lean tools, the team was able to increase order accuracy, reduce costs, and improve on-time delivery.
Actions Taken
- Designed and implemented a System For Managing the product life of each SKU and to identify and eliminate non-performing SKUs.
- Developed a methodology and model for determining the best location of SKUs in the seven distribution centers to reduce inventory waste and optimize fulfillment.
- Reduced shipping costs by consolidating multiple same day, same customer orders and by creating optimal alignment of zip codes to distribution centers with more favorable regional carrier rates.
- Initiated a vendor performance reporting system and established roles and responsibilities for vendor interfacing.
- Implemented the best practice of purchasing products in the same configuration in which they are sold, reducing handling costs and errors.
- Optimized warehouse operations with improved accuracy and reduced cost per line through process improvements, standardization and labor staffing master scheduling.
- Established critical rules for customer satisfaction and implemented supply chain reporting metrics for improved management control.
