Case Study: UK Government Department
Developed a Cost to Deliver model
The Challenge
The client operated a highly volatile supply chain spanning a diverse inventory set and multiple warehouses, each running different inventory, warehousing and financial systems. The true cost to serve was unknown, leaving end-customers unaware of the supply chain or financial consequences of their choices. As a result, the organisation could not baseline operational spend, segment its customer base, or identify cost-driving customers and SKUs.
Data Sets Analysed
Distinct UINs
Distribution Centres
Financial Baseline
(In Scope Costs)
The Squarcle Solution
Squarcle mapped the current supply chain, including warehousing, processes, systems and equipment, and established a cost baseline using the previous year's spend. We integrated a wide range of complex data sets from a fragmented ERP environment. We then conducted activity-based costing, linking costs to activities, people, infrastructure and equipment. Using advanced analytics and visualisation tools, we enabled the client to understand their supply chain costs and the behaviour of their customer base.
The Results
Designed and delivered a bespoke SC Cost to deliver model that provides the cost to deliver each individual SKU against a product range of 250,000 SKUs, to each FLC, customer, 3PL provider or core fleet. Identified Operational efficiency improvements to include SKU rationalisation, direct delivery and economic order quantity opportunities for a £198M annual operating cost.
Squarcle are deep supply chain experts with intimate knowledge of Defence Support. They have successfully transitioned us into a digital era, ensuring Defence outputs, while reducing supply chain risks and operating costs.
