Project Background

The customer is a global healthcare distributor, specializing in medical and surgical supplies for the acute care market. One of the biggest challenges they faced was a shortage of internal staff with the knowledge of logistics or the time needed to meet the goals of the business. They asked a team from Scott Sheldon to conduct a pilot program in the Midwest that could serve as a proof of concept.

After an initial one-week assessment, a project road map was developedcontaining projects grouped into 3 categories: quick hits, tactical, and strategic.

The Action

Scott Sheldon engineers evaluated and analyzed a range of new strategic network solutions that would work for both the Midwest and across the nation. We recommended a two-tier distribution and delivery strategy that reduced the number of distribution centers required to support the regional customer base by half.

Our plan also budgeted for operational savings in inventory, occupancy and transportation costs and provided estimates for the capital and realignment costs.

Result

Projects that were implemented before season started delivered 75% of the total projected savings—well ahead of schedule and additional facility and system enhancements have been identified as “post-peak” improvements for 2010.