Logistics (Distribution and Transportation) is a key component of an overall Supply Chain strategy.

The Context Group works with every stage in the supply chain: manufacturing, wholesalers, retailers, and 3PL service providers to improve the efficiency of their logistics operations

DISTRIBUTION
  • Distribution Strategy and Planning
    Review requirements driven by corporate strategy and plans, develop options, recommendations, and action plans. A typical review includes evaluation of:
    • Facility Location – Review criteria, evaluate options and costs, conduct due diligence, and recommend location with implementation schedule.
    • Facility Planning & Design - Design criteria, operations analysis/design, support operations, building, equipment, service requirements, costs, ROI, & schedule.
    • Facility, Material Handling Equipment Selection - RFP preparation, competitive bidding, evaluation of bids, due diligence
    • 3PL Selection & Management - Preparation of requirements, RFP, analysis of proposals, recommendations and performance monitoring.
    • Operations productivity and capacity improvement

    The recommendations may result in a facility start up, a 3PL selection process, or an operations productivity and capacity improvement initiative for existing operations

  • Operations Productivity and Capacity Improvement
    These initiatives typically involve all or several of the following:
    • Capacity Improvements - Processing, storage, facilities utilization
    • Operations Re-engineering – Analyze & implement improvements (work aids, equipment, layouts, productivity, quality, training, supervisory effectiveness)
    • Pay for Performance - Work count, individual work standards and incentives, group programs, gain sharing, labor pool and cross training, team programs, union relations and contract modification, payroll admin,
    • Management & Supervisor Development - Analysis of requirements, description of responsibilities and tasks, job descriptions and measures of performance, training in supervisory effectiveness.
    • Cost Reduction - Supervision, direct labor, transportation, charge backs, reverse logistics, occupancy, packaging and supplies, inventory, support staff.
    • Systems & Controls - Systems requirements to handle shipping, receiving, order processing, inventory control, & control of labor, supervision, purchasing, etc)
    • Service Performance - Metrics to monitor internal & external performance
    • Returns & Allowance Control. – Vendor requirements, process changes, accuracy monitoring, follow up, vendor negotiation on charge backs.
    • Plant maintenance - Planned maintenance, OSHA, safety, security, employee comfort, housekeeping.

    An initial evaluation is conducted of the potential operations savings, a plan of implementation is developed, and we assist our clients in implementing changes to accomplish the projected operations improvements and savings.

TRANSPORTATION
  • Cost Assessment (modeling and optimization, freight spend, cube utilization improvements, LTL/TL weight break analysis by lane, LTL consolidation design, review of consolidation rate structures, order consolidation, parcel zone-skipping, etc.)
  • Strategies (cross-dock, fleet outsourcing, backhaul, 3PL, etc.)
  • Best Practices
  • Rate Negotiations (core carrier programs, low-cost carrier selection)
  • Systems & Controls (transportation management system, dock scheduling, freight audit and payment processes)

LOGISTICS NETWORK DESIGN
  • Transportation Model (service requirements, supply lead times, product cost, transportation cost, and cost of inventory)
  • Facilities (number and location of facilities, type of facility, location studies)

Mudd Jeans was experiencing extraordinary growth that challenged their ability to service customers. The Context Group worked with Mudd to increase capacities, strengthen controls, cut costs, achieve better vendor performances and improve customer service. The result was that Mudd could ship the design year volumes at lower cost and with improved customer service.

Capacity improvements included the merchandise processing, storage, in process and overall facility utilization. Controls focused on labor performance, internal accuracy and systems support. Customer service included accuracy to customer and OIP time. Cost reductions were achieved in direct labor; charge backs, occupancy, packaging and supplies and inventory control. Vendor performance worked on an audit process; follow up gained improvements in accuracy and quality.

Bayer Clothing: The Context Group was retained to rationalize distribution processes, to cut costs and to improve controls. The result was that productivity increased 60% and costs were cut by 40% for an operation that already had a gain- sharing program and a union contract in place. Major improvements included the following: Losses to capacity were reduced through job combinations, layout changes, workstation designs, equipment improvements, simplification, work aids, systems support, accuracy improvements, etc. Standards and performance measures were developed for each processing operation against which operators were paid individual incentive earnings. Other sources of savings included supervisory effectiveness, packaging and supplies, equipment and facility utilization, etc. Labor and accuracy controls were improved and processing capacities increased.


Circuit City Stores: Retail distribution center supplying sortable CD’s, DVD’s etc. and non-sortable merchandise to stores. We conducted an analysis of six sorter options, recommended the best option and implemented the procedures and chosen equipment. Also upgraded non-sortable processing and other operations so that the DC could handle store and throughput growth for the design year, which was three years hence. Savings came from labor, systems support, equipment modification, new procedures and reduced losses to capacity

 

Keystone Industries, a Canadian jeans wear producer, asked The Context Group to design a new distribution center to allow the company to achieve doubling their volume over three years. Conceptually, the project included the implementation of new storage and picking techniques. Following a successful installation, turns levels increased 50% with reduced staffing.

Sara Lee Canada retained The Context Group to assist in completing a distribution strategy initiative. Because of rapid changes in the organization and resulting increased unit volumes, total inventory levels had increased to unacceptable levels. By rationalizing the capacities of five warehouses, productivity levels increased significantly and overall turn levels increased more than 20%.

3PL Experience

The Context Group has worked with a number of 3PL firms, including the following:

  • Alliance Shippers
  • CTLogistics
  • Exel Logistics
  • Fleming
  • Menlo Worldwide Logistics
  • Penske
  • Ryder
  • Sunland Distribution
  • SuperValu Logistics
  • UPS Supply Chain

We have evaluated 3PL’s for our clients as part of a logistics outsourcing solution, and have worked in partnership with several 3PL organizations to implement innovative strategies and solutions for their clients.

 

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