Collaborating on Strategy and Design

Details

CJ Logistics worked with a leading healthcare customer to design a new optimal network. Our study revealed a new site location would lower transportation and inventory costs and support the customer’s future plans for business continuity and growth. Together, we designed and implemented a greenfield solution from the ground up. The result: seamless execution and customer cost savings.

Situation

CJ Logistics handles a Fortune 20 healthcare customer’s branded and private label medical and surgical devices and consumables. Due to business growth and the need to diversify inbound port locations, this customer needed to expand operations, and requested our help to identify optimal network options through network modeling.

Solution

In collaboration with our customer, CJ Logistics conducted a network analysis and identified an optimal site for a new distribution center using an East Coast port. For the initial network analysis phase, we gathered daily transactional data sets and specific customer requirements. We used industry-leading design software to determine the optimal geographic location for a new site based on transportation, warehouse and inventory costs. Next, we recommended an exact location for the construction of a new distribution center, taking into account available real estate and local wages, regulations, and incentive credits.

As a result of our analysis, our customer requested that we implement our solution by constructing and opening a site in the recommended location. We managed the complete operational start-up, including construction of the building, building design and layout, rack installation, capital procurement, Rx and medical device licensing, IT systems and hardware set-up, and staffing.

Result

With an inbound warehouse located closer to the customer’s distribution centers on the East Coast, our solution improved transit times and provided transportation savings of approximately 12%. The use of an East Coast port lowered inventory carrying costs and provided additional space for future product launches. The East Coast port enables business continuity plans when congestion and closures occur at other ports. CJ Logistics delivered the project on time and on budget.