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Case Study

Driving synergy throughout a global food company

To drive cost reduction and service improvements, the senior management of a $6 billion global food company wanted to identify supply chain synergies across its network. The firm had grown organically and through acquisition to more than $1 billion in revenue in the U.S., operating six acquired companies as autonomous business units with more than 50 distribution centers/warehouses across the country. After a highly competitive process, Jones Lang LaSalle was engaged to help create a consistent Distribution Network Strategy.

Our Supply Chain & Logistics Solutions team analyzed the cost and service performance of the company’s current distribution network by creating a baseline model utilizing i2 Strategist network modeling software. We then tested and validated various consolidation scenarios ranging from 3 to 7 regional distribution center locations to both improve service and lower real estate costs.

The team identified more than $20 million in potential freight savings, $5 million in labor and real estate savings, and $250,000 in inventory reduction opportunities, as well as a one-time $4.8 million reduction in inventory.  We worked closely with the company to implement our solution, which included everything from business and economic incentives negotiations with public bodies to Project and Development Services for physical structures.  Now, the company expects to save $25 million annually and improve customer service through its well-located distribution network. 

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