Network Optimization Facilitates Annual Reduction in Supply Chain Costs

Situation

The customer did not have a sophisticated tool for optimization and it was done only on the basis of transportation cost. They had a multi echelon supply chain with high logistics costs and their operations involved complex tradeoffs between logistics cost, service and inventory holding. With the introduction of GST the customer was faced with a new challenge apart from dealing with changes in business model from retailers to super stockists.

Impact

The customer had a multi echelon supply chain with high logistics costs and this affected their profitability. The supply chain was sub-optimal and the different means available to reduce cost, like sourcing cost, were left out of optimization scope.

Resolution

ITC Infotech prepared the product flow optimization for a shorter horizon of 3 months. The large scope of optimization to identify changes to the distribution and sourcing network considered various operational constraints before arriving at the optimal solution.

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