Case Study

European Distribution Centre implementation

Tokema devised a warehousing strategy for a French textile brand, reducing logistics costs and increasing operating margins.

Client

  • Well-known French textile brand achieving 750m€ turnover per year.
  • Combination of owned and franchised stores in France.
  • Increasing number of stores in Europe – franchised and multi-brand.

Challenges

  • The client had significantly developed its sales in Europe over the previous three years.
  • All stores were replenished daily from the client’s central warehouse located in the Paris region.
  • Transportation costs were a major component of the logistics cost and downgraded the operating margins (many express shipments performed due to service quality issues).
  • The central warehouse capacity was used at around 100% due to the ever increasing activity outside of France.
  • The overall quality of service (especially on-time delivery) needed to be improved.
  • The new warehouse needed to be operational within the next six months.

Tokema Approach

  • Tokema was appointed by the client to support their warehousing strategy.
  • An initial study was made by Tokema consultants to a) evaluate the ‘centre of gravity’ of the warehouse, knowing the main export markets were Scandinavia and Germany, and b) compare a ‘make’ or ‘buy’ option.
  • The ‘buy’ option was selected and Tokema built the technical requirement specifications that were included in the Request for Quotation.
  • A proposal document was sent to a list of selected third-party logistics companies.
  • Tokema consultants supported the client to manage the RFQ up to the contract discussions with the logistics service provider.
  • Tokema monitored the implementation with the logistics service provider up to the implementation of a continuous improvement methodology with the operations team.

Benefits

  • The warehouse was placed in Germany as per the ‘centre of gravity’ calculations.
  • Inland transportation costs reduced by 23%.
  • 100% variable logistics cost model with optimised logistics costs – multi-user warehouse (buy option).
  • Increased quality of service to export markets.
  • Better focus on French operations from the central warehouse.
  • Increased operating margins resulting from reduced logistics costs and close to nil express shipment.

Discuss your next project

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