A new logistics target operating model to save $100M in 3 years
A new logistics target operating model to save $100M in 3 years
CLIENT STORY

A new logistics target operating model to save $100M in 3 years

KPMG helped a global industrial manufacturing conglomerate coordinate and optimize its distribution and transportation efforts as well as rationalize supply chain technology.

Client
A global industrial manufacturing conglomerate
Sector
Industrial manufacturing
Project
Logistics target operating model design and supply chain technology rationalization

 

Rapid growth demands standardization and centralized decision-making

The client enterprise, a global diversified industrial manufacturing conglomerate, had doubled in size over the previous two years through numerous mergers and acquisitions and changed strategy from that of a holding company to one of an operating company. Systems and capabilities siloed at the business unit level were no longer adequate in the context of a much bigger and more complex organization.

The client chose KPMG to be its strategic partner for assessing the current state of logistics operations around the world, understanding who was performing logistics work and where, identifying and quantifying improvement benefits, developing an integrated global logistics strategy, and facilitating the design of a new operating model to drive performance and reduce cost.

 

KPMG cut quickly through complexity

KPMG’s approach to assessment and transformation design was cross-functional with multiple tracks and five phases. In just three months, an integrated team of KPMG advisors and client representatives were able recommend:

  • a global distribution network, with 5% potential run rate savings identified
  • a global transportation strategy, with 9-15% potential run rate savings identified
  • a plan for distribution operational efficiency, with 6%-7% potential run rate savings identified
  • an enterprise-wide supply chain technology solution, with 7%-11% potential run rate savings identified
  • a well-defined target operating model
  • and ways for new visibility into roles within the global logistics organization and its footprint.

 

We supported this client through the entire journey, from facilitating alignment on the high level strategy through detailed organizational design all the way to full implementation planning, at the same time identifying key cost reduction opportunities.

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