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Establishing a central distribution network for an automotive distributor

Hatmill were asked to develop a centralised distribution network for an automotive component distributor in order to provide a solution to their availability challenges and deliver cost savings.

The result: a new NDC operating through a hub and spoke network.

Executive Summary

Project Description:

Hatmill were asked to develop the client a central distribution solution which would provide both financial benefits alongside improved availability.

Project Challenges:

  • Infrequent stock replenishment direct to branch was leading to poor availability
  • Long supplier lead times prevented peaks in demand being replenished promptly
  • The buy-in price of components was inflated due to it including delivery costs to local branches

Hatmill’s Solution:

In order to help the client, achieve their supply chain goals we:

  • Completed analysis on existing supplier delivery costs to branches in order to identify the size of the opportunity
  • Undertook centre of gravity analysis to understand the optimum location for an national distribution centre (NDC)
  • Collaborated with suppliers to develop the lowest cost processes through the end-to-end supply chain
  • Applied fresh food stock allocation and picking methodology to deliver industry leading fulfilment rates
  • Built and established a 100,000 sq. ft. DC providing daily replenishment and returns to the client’s growing branch network
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