By undertaking a comprehensive supply chain analysis, we advised a global medical technology company on establishing a more cost-effective distribution network.
With increasing market pressure from cheaper imports, our customer - a large medical technology company supplying medical equipment - wanted to know whether its distribution network could be made more cost effective while maintaining current service levels. Limited warehouse space and functionality was an additional cause for concern, limiting capacity for future growth.
Toll was asked to perform a comprehensive supply chain review of the distribution network in order to analyse the current network costs and propose future network scenarios that would support the customer’s business objectives.
Through detailed modelling that included data and cost analysis, we were able to comprehensively define the customer’s current network costs as well as provide a supply chain solution that outlined multiple distribution network options for the future. As part of our solution, we proposed shifting the main distribution centre to be closer to the port, to reduce travel time between the port and the trains and deliver direct cost benefits.
The new network design also provided the customer with the opportunity to expand its Australian warehouse footprint and function, allowing future growth.
The recommended future freight network costs were estimated at 2 per cent less expensive than the current network while maintaining the same coverage and levels of service to its customers.
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