Cost savings and increased flexibility for European food company’s supply chain

The challenge

Our client is a European food company producing bakery and pastry products for wholesalers, restaurants, and retail outlets across the world. Within Europe, factories in countries including France, Italy and the United Kingdom produce items for delivery across Europe and the UK. After years of organic growth focused on production, the company decided to review the structure of its supply chain to reduce costs and lead times. It asked Royal HaskoningDHV Supply Chain & Logistics team to model and optimise its European supply chain network.

The solution

Data visualisation shows where optimisation is possible

To visualise the flows, good quality data is needed, including production characteristics and capacity insights of various locations as well as detailed transactional information on road transport and shipping. “We helped the client identify what data was needed and how to gather the data,” said Jack Pool, Global Business Development Director Supply Chain & Logistics at Royal HaskoningDHV. “Sometimes assumptions need to be made where data is not readily available or where we need to make comparisons using information which has been based on differing criteria.”

The result

Powerful, adaptive network has reduced logistics costs by more than 10%

It was clear from the data visualisation that some flows were not optimal. Then, using a mathematical model, it was possible to explore multiple scenarios aimed at raising efficiency across the network. For example, the model could identify the ideal location and size of a cold store and examine the impact on costs, production capacities and delivery times of changing the production location for individual products.

Based on the business case developed for each scenario, a five-year road map was drawn up to make the network more powerful and adaptive. It has cut logistics costs by at least 10% through increasing direct shipments from factories, reducing expensive long-distance shipments to customers and optimising production to shorten delivery distances.