A major company in the food and beverage sector approached aBCD Consulting with several needs, including identifying and designing its national logistics hub (>30,000m2), capable of supporting the company’s five-year growth plans.
The challenge
Following the definition of a new network design, the geographical area and technical characteristics for the creation of the central logistics hub for domestic distribution across all sales channels (modern trade, normal trade, Ho.Re.Ca.) were identified. aBCD Consulting was tasked with identifying the suitable real estate opportunity and designing the site layout to optimally manage the flows and volumes involved, estimating the costs by category (capex, opex, fixed, variable, etc.).
The solution
The aBCD Consulting team adopted a structured approach to tackle the mission:
1. Preliminary analysis:
Study of nationwide movement flows,
product characteristics, seasonality, and current product placement through in-depth data analysis.
Direct observation
of the layout and current operational processes, identifying main issues and existing constraints.
2. Real estate market analysis:
Scouting of real estate opportunities
Within a 20km radius of the identified centroid, scouting of existing and/or developing real estate opportunities (with an availability horizon of approximately 18 months).
Creation of an evaluation model for the real estate opportunities gathered,
based on their alignment with the ideal centroid, size, functionality, sustainability, timelines for takeover, available features, and costs.
Identification of the best opportunity
to develop the design.
3. Flow and item characterization:
Analysis and definition of the inbound flow characteristics
from the production plant (quantity, timing, frequency, product mix, available operational window, seasonality, optimal unloading methods, etc.).
Analysis and definition of item characteristics
(product categories, weight, dimensions, packaging, annual turnover, stock levels, etc.).
Analysis and definition of outbound flow characteristics
(sales channels, seasonality, picking methods, loading methods, transportation methods, sales drop-size, etc.).
4. Layout definition:
Definition of bays, areas, and paths
dedicated to inbound and outbound logistics.
Definition of shelving storage areas
and stack/stowage areas.
Within each area, definition of allocations based on rotation class (ABC),
product characteristics (weight, stackability, etc.), and predominant picking method (case picking or full pallet picking).
Definition of picking sequences
(heavier items always at the bottom, less stable packaging on top, etc.).
Definition of areas dedicated to outbound distribution
across different sales channels, particularly for Ho.Re.Ca. distribution.
5. Cost estimation for implementation and operation:
Definition of cost items needed
for full site setup and implementation, split between CAPEX and OPEX and by type.
Evaluation of individual cost items using various sources
(aBCD's archives and databases, offers already available to the client, market offers, observers, institutional sources), compared and validated by benchmarking activities.
Simulation of a cost range
for executing operations by a hypothetical 3PL logistics provider.
Estimation of the timeline for setting up the logistics hub
and transferring goods and operations.
6. Decision support:
Estimation of "end-to-end" costs and benefits
generated by the repositioning of the logistics hub, both in economic terms (e.g., reduced shuttling costs from the production plant, reduction in the number of peripheral warehouses, impact on Ho.Re.Ca. distribution costs, etc.) and in performance terms (better distribution of inbound flows over multiple work shifts, closer proximity to major consumption centers, etc.).
Based on the projected five-year growth plans,
estimation of the sustainability and adequacy limits of the current model and the risks associated with maintaining it over time.
Identification of any alternative plans.
Results
Thanks to aBCD Consulting’s intervention and warehouse management consulting services, the company was able to make the right evaluations supported by quantitative and qualitative analysis and make a strategic decision with full awareness. The scale of the operation has an economic value of millions of €/year, with long-term contractual commitments (up to 6 years), and represents a radical change in the extended operational organization, characterized by historical balances.
