Acquiring a company meant acquiring new supply chains. An analysis of the new, combined business' needs resulted in relocating a distribution centre together with multi-million dollars in savings.
A traditional supply chain from China to Europe used to be a choice between air freight or a container ship. Trials demonstrated that rail freight was a viable option - with acceptable lead times, and provided a cost-effective alternative to both air and ocean transportation.
Analysis illustrated that the cost of implementing a distribution solution with two DCs instead of the single existing facility more than outweighed the cost through the increased revenue and improved customer service gained from shorter lead times.
Consigning the delivery of goods in China close to the manufacturers and consolidating the various suppliers' shipments into full container loads destined to single destinations in North America, saved the customer in excess of $1 million in the first year compared to the previous transportation solution where part container loads were sent separately.
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