A Supply Chain restructure for British Wool that made significant cost savings and created long term sustainability

Profile

Pricing pressures placed a sharpening focus on operating costs in a business with well-established ways of working. With a depot network spanning the UK & NI, only a significant re-structuring would yield the cost savings needed to sustain the organisation.

Goal

Reset the operating network on a sound footing to:

• Reduce distribution costs
• Enhance productivity within depot operations
• Rationalise the distribution network and release freehold sites for sale

Approach

The significant opportunity to increase operational efficiency required a systematic review of both the distribution network and ways of working. Drawing on some critical elements of our methodology, particularly important elements included:

• Network modelling and design – creating a data-driven understanding of network options supported the pragmatic assessment of viable changes to the depot network
• Organisation - reviewing the core activities at depots guided the adjustment of roles and resource requirements. Balancing workload across seasons enhanced efficiencies and transformed operating costs.

Along with evaluating current site capabilities, our review confirmed the potential costs and benefits of change together with the associated risks. A roadmap indicating the transition steps in moving from current to optimal was also prepared in support of creating a compelling business case.

Result

Significant improvement in operating efficiency and effectiveness:

• Consolidation of the distribution network from 12 to 8 principal sites
• Distribution cost reduction of around 12%
• Facilitated the sale of 3 warehouse sites
• Enabled consistent customer service across the network

Takeaways

• Detailed, pragmatic analysis of network options underscores implementation planning
• Constructive challenge of ways of working supports dialogue and change

Testimonial

"OP2MA played a crucial role in responding to the immediate challenges brought on by the Covid pandemic and the subsequent reshaping of our operations and depot network in order to deliver material cost savings for the long term."

Andrew Hogley, CEO, British Wool