Global FMCG Manufacturer
Cost to Serve
Global FMCG manufacturer of drinks and snacks with a complex set of logistical and ...
Problem
- Identifying the true end to end Cost to Serve to the Customer of every SKU in the portfolio
- Ultimately the aim was to create an integrated tool to calculate CTS and scenario test that the commercial and supply chain teams could use for pricing and cost saving
- Due to the myriad of systems there was some doubt this would be feasible
Solution
- Sequoia conducted a pilot Proof of Concept study to assess the feasibility of creating and deploying such a tool
- This initially involved comprehensive interviews to understand the (sometimes competing) functional requirements of all key stakeholders – an essential step to then agree what would be included in the PoC project
- After establishing a clear view of the data and systems landscape, a highly granular set of supply chain, logistics and commercial data was collated and mapped into SQL from a set of disparate systems
- Activity-based cost allocations were agreed and then applied within the model across the stages of the Supply Chain
- Results dashboards facilitated stakeholder engagement and drill down to identify specific opportunities
Impact
- A comprehensive model was created which dealt with the complexities of the overall challenge and provided actionable insights for the pilot market: conservatively the PoC estimated an opportunity to save $40m, split across various go to market channels. This opportunity was previously hidden and unquantifiable
- A review of the industrialisation & deployment opportunities was completed, with the project marked as one which could deliver:
- Identify opportunities to reduce excessive Supply Chain or Sales & Marketing costs
- A focus on channel / location / brand / warehouse to understand opportunities
- Challenge network design based on actual Cost to Serve
