Retail Supply Chain Reengineering
Our client was an apparel retailer with a large store network in Australia and New Zealand
Leydin Consulting Group was engaged by the client to review the retail supply chain from end to end (from offshore suppliers in China direct to the store network in both countries) in order to identify opportunities to reduce cost and lead times.
The existing process utilized a single port of entry, local container unpacking and handling, local connote creation and labelling, transportation via road from Melbourne to stores throughout Australia and distribution via air freight to stores in New Zealand.
Leydin Consulting Group worked closely with the clients production and shipping teams, offshore suppliers in China and the existing logistics service providers in Australia and China to design and implement the following solution:
- Introduce a two port entry strategy (Melbourne and Sydney) with weekly FCL shipments to Australia and weekly LCL shipments directly to New Zealand
- Moving connote creation and labelling to the existing 3PL service provider in China
- Eliminating the container unpacking and handling by the 3PL service provider in Australia by delivering all inbound containers directly to the transportation service provider’s depots in Melbourne and Sydney
- Elimination of international airfreight costs for shipments to New Zealand stores
- Reduction in local transportation costs by approximately 10%
- Reduction in delivery times to Australian stores by 3 days and New Zealand stores by 7 days
- Reduction of the carbon footprint created by road transport emissions by approximately 25% due to a reduction in the KM travelled
- Reduction of the carbon footprint created by international shipping emissions by more than 50% as a result of the changed shipping mode
Domestic Transportation Cost Savings
Our client was a retailer and wholesaler with a large national store network in Australia
Leydin consulting Group was engaged to review the existing domestic transportation rates after the client had been issued with their annual rate increase from the incumbent service provider.
- Request confirmation of current rates and obtain shipment data for the previous 12 month trading period
- Identify and request quotations from other suitable service providers
- Develop cost model to compare and analyze current and proposed rates against rates submitted by other service providers
- Negotiate with incumbent and other service providers to obtain best possible rates based on total cost across all services and all origin and destination combinations
- Post implementation review and ongoing weekly audit of service provider invoices to ensure correct freight rates and accessorial charges have been billed
- Proposed annual rate increase avoided
- Negotiated reduction of rates that represented a further saving of approximately 4% on existing rates
- Retained incumbent service provider and avoided risks and IT integration costs associated with transition to a new service provider
- Post implementation review and audit of billing identified incorrect rates being applied and subsequent credits received
- Ongoing review and audit of weekly invoices results in credits to the value of approximately 2% to 3% of the total billing
Import Duty Recovery
Our client was a large accounting firm acting as the administrator for an apparel retailer and wholesaler.
Leydin Consulting Group was engaged by the client to audit import duty payments over a 12 month period in order to identify and pursue duty refund opportunities.
Leydin Consulting Group worked closely with a number of internal and external stakeholders and adopted a 5 step process
- Request import shipment data from both the international freight forwarder and the Australian Border Force
- Analyze and match both sets of data to identify payments of duty that had been made on items that would ordinarily be subject to preferential rates of duty and therefore potentially eligible for a refund of duty
- Liaise with both the international freight forwarder, overseas suppliers and relevant overseas customs authorities to coordinate the collection of the relevant shipping documents required to support an application to the Australian Border Force for a refund of duty
- Liaise with the international freight forwarders customs broker to coordinate the duty refund applications for the eligible shipments
- Monitor the status of the refund applications and reconcile the refund amounts against what was expected and what was actually received
Tags: Logistics Cost Recovery
- Approximately $90,000 of duty retrospectively recovered