US supply chain for global audio products company
Existing distribution center no longer the best location
Acquiring a company meant that this customer also acquired a supply chain and a distribution center on the west coast of USA. It quickly became apparent that the location was causing delays, tying up valuable stock and didn't suit the new, larger business.
Tax incentives not enough to offset other costs
The distribution center in Reno, Nevada, had been set up due to local tax incentives - and on the surface, those incentives seemed very attractive.
Recalculating the center of gravity of the supply chain
DSV's innovation experts analyzed the customer's network and determined that Reno was actually a poor choice for the new business. In fact, the analysis showed that Chicago was closest to the "center of gravity" and would give savings on lead times and working capital. The shorter lead times would more than compensate for the loss of tax incentives in Nevada.
Benefits
- US $2.2m cost savings
- Lead time improvement of 3 days
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