Multinational Consumer Goods Manufacturer

Tasks

Analysis of the client’s existing logistics network and develop a target operating model aligned with its three-year growth strategy, evolving customer base, and changing regional sales distribution.

The increasing share of direct shipments, stronger regional demand, and higher expectations for delivery speed had led to rising logistics costs and reduced network transparency. The client required a resilient, scalable, and cost-efficient supply chain capable of supporting future business growth.

What was done

The project began with a comprehensive assessment of the existing logistics network. The NOYTECH team analyzed transportation cost structures, delivery frequencies, customer geography, and the constraints of the current infrastructure.

A baseline network model was developed to identify key inefficiencies, including redundant transportation routes, suboptimal procurement of transport services, and imbalances in delivery frequencies across major regions. A separate focus area was understanding the relationship between service levels and logistics costs, as a significant share of expenses was embedded in inefficient purchasing practices and the low predictability of shipment volumes.

The next phase involved modeling the target network configuration. Multiple scenarios for the placement of distribution centers and regional warehouses were evaluated, taking into account sales dynamics, the expansion of regional customer segments, and required delivery lead times.

Special attention was given to eastern regions and other high-growth markets. Since customer demand varied significantly across locations, the proposed scenarios reflected differences in consumption density and evolving service level expectations.

Based on the analysis, the optimal network configuration was selected and accompanied by a phased implementation roadmap.

Another key component of the project was logistics sensitivity analysis. The team evaluated the impact of changes in transit times and transportation tariffs on the overall logistics budget, compared the proposed network against the baseline model, and assessed secondary effects such as an increasing share of direct shipments and seasonal demand fluctuations.

The final stage focused on evaluating opportunities for engaging third-party logistics providers (3PLs). NOYTECH assessed the feasibility of outsourcing logistics functions, developed recommendations for regional warehouse models, and proposed shipment consolidation strategies to further reduce operating costs.

Result

• Development of eight logistics network scenarios, including alternative configurations with up to four distribution centers and cross-docking facilities.
• Procurement of a sensitivity analysis of a 20% increase in transportation tariffs and prepared recommendations for the lowest-risk implementation scenarios.
• Achieving a 10.8% reduction in the logistics budget through network optimization and freight flow redistribution.
• Identification of additional shipment consolidation initiatives that delivered a further 17% reduction in logistics costs.
• Design of a scalable logistics network capable of supporting continued business growth and future changes in sales distribution.