Optimizing a Supply Chain

Details

CJ Logistics collaborated with a customer to design their supply chain with a focus on service improvement and cost savings, reducing the number of locations from 20 to nine. Then, CJ Logistics successfully transitioned 14 buildings in 18 months, sequencing the transitions logically and at appropriate time intervals, and placing a CJ Logistics leader on-site at the customer’s headquarters early in the start-up phase.

Situation

CJ Logistics serves as a Lead Logistics Partner (LLP) for a Fortune 500 CPG customer. In this capacity, we manage their entire supply chain from the Central Distribution Centers (CDCs) to their wholesale customers throughout the country, including seven Regional Distribution Centers (RDCs) and five crossdock operations.

Previously, the company’s distribution network consisted of one CDC adjacent to a manufacturing facility operated by a national 3PL, a large export warehouse operated by that same 3PL, 18 warehouses, and dozens of carriers managed by an in-house traffic department. The company embarked on an initiative to rationalize the network and minimize the number of locations. This involved transitioning all non-core activities, including management of the distribution network, to leading suppliers.

Solution

CJ Logistics worked collaboratively with our customer to design the supply chain with a focus on service improvement and cost savings. We tailored our solution to achieve their business goals, which included retaining current RDC and carrier partners to mitigate business risk during and after the transition. Our network design streamlined their operations from 20 locations in total to nine warehouses (two CDCs and seven RDCs), and five crossdock operations. Due to the quality of our solution, the trust we established throughout the process, and the engagement of our executive team, we were awarded the business.

We transitioned 14 buildings over an 18-month time frame, taking over existing operations and replacing the original CDC with refitted existing sites. Upgrades included removing, modifying and installing racking, re-doing striping and signage, relocating conveyor equipment, ordering new forklifts, reorganizing office space, performing IT integration, and installing network gear and a new Radio Frequency (RF) network. We also transitioned current carriers and brought new carriers into the network, partnering with 3PLs meeting our quality standards, and relocating product from 3PLs not meeting our quality standards to new partner locations.

Result

Streamlining this customer’s network resulted in a significant seven-figure savings, including the elimination of network nodes and reduced inventory carrying costs. Key to the seamlessness of these transitions was their logical sequencing at appropriate time intervals. Another key to the success of the relationship was our joint decision to place a CJ Logistics leader on-site at this customer’s headquarters early in the start-up phase. As a result of our successful implementation and performance, the customer named CJ Logistics their Partner of the Year in our first year of serving as their Lead Logistics Partner.