Logistics & Supply Chain Makeover for Swedish Cosmetics Firm in China

A Swedish cosmetics company was experiencing issues with its supply chain with shortages in stock in one location and oversupply in others.

ARC Consulting assisted the client to evaluate the supply chain and identify the root causes of the experienced issues.

ARC Consulting further provided implementation support of the recommended actions, assisting the client to immediately reduce costs and increase efficiency of operations for sustainable growth.

Cosmetics box and equipment

The client was experiencing issues with its supply chain management consisting of primarily purchasing, allocation and distribution. While these areas at the time had a limited impact on the company’s bottom line figures, these issues had the risk of growing in proportion to volume and provide obstacles for future lean growth.

ARC Consulting was contacted by the client to assist in evaluating the supply chain, from procurement of products for the central warehouse to allocating stock between regional PPCs to identify the root causes of these issues.

Furthermore, ARC Consulting was also asked to recommend actions that could be instantly implemented to reduce cost and increase the efficiency of operations.

As a first step to analyze the current situation, ARC Consulting initiated a detailed situation analysis of the client’s supply chain based on the SPRO model.

SPRO Model analysis diagram

By dividing the problems according to the parameters of strategy, processes, resources and organization, key issues were identified along with the impact it had on the efficiency of operations in the company.

The root causes of the supply chain inefficiency were primarily a lack of a holistic strategy, a lack of process instructions and guidelines for employees, a lack of standardization of documents and templates used and a lack of integration between different functions and unclear role responsibilities.

13 Actions were formulated to address the identified issues and at the same time save costs.

Table showing thirteen actions taken

ARC Consulting created multiple tools for the client’s staff to use in their day-to-day work as well as provided training for how to optimize decision making in the company.

With the provided new tools and training, the client can ensure that decisions making is fact-based, aligned with the overall strategy and scaleable with the organizational growth.

The analysis of the logistics and warehouse further outlined cost savings of closing/opening new warehouse locations and changing distribution routes. In addition, ARC Consulting also provided a comprehensive supply chain support document covering strategy, new and improved processes, resources and organization for the supply chain operations in China.

Templates for purchasing, allocation and distribution was also set up along with a fully automated and interactive model showing all designed KPIs in one location, enabling easy tracking and monitoring of purchasing, allocation and logistics performance.

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