Supply Chain Networks are the backbone of product companies. It's the infrastructure through which value is added and it's highly complex by nature. Often companies are overwhelmed by this complexity and the organization structure where functional silos take charge of portions creates significant disconnects and inefficiencies.
Networks are fundamentally a system of flows and stock points. Each flow has its own characteristics. Production flows transform materials into finished goods following certain characteristics (capacity, yield, reject rates, fixed and variable cost...), logistic flows move materials or finished products from one stock point to another also following attributes (lead time, capacity, unit cost...). Assembling these flows together into an entire supply network generates a massive amount of complexity. Particularly when you have hundreds of suppliers, a bunch of manufacturing plants, a few warehouses, and hundreds or even thousands of customers. Adding up product-specific constraints and you end up with a massive black box with little understanding of whether this system is actually cost-efficient and truly supports your revenue growth.
Distribution is often the part of the network that integrates the most.
CEL core expertise is the supply chain network. And often the most strategic part of the network is the distribution as it is the side that ensures revenue to be generated (serving customers) while being a significant cost driver.
CEL has the capability to perform modeling and quantitative analysis of a given consumer market integrating geographic, demographic, and behavioral dimensions. This in order to characterize and understand the market drivers and demand dynamics in order to define a solid Route-To-Market Strategy. We perform a Cost-To-Serve analysis to help our clients to understand the effort required to reach those markets.
Ultimately, we help to bring factual answers about where and how marketing, sales, and distribution initiatives should be made to capture most of the demand.
This type of analysis also provides a market intelligence framework which can be reused for planning purposes.
“Demographics help to model criteria referring to the population such as density, population ethnic mix, average household income, GDP per capita, etc.”
The behavioral analysis integrates the characteristics relating to customer behavior such as average order value, demand pattern, predictability, price sensitiveness, etc. Segmenting demand with such characteristics allows you to manage inventory, replenish facilities, plan stock transfers, or allocate capacity, and makes a massive difference in your ability to serve your customers toward profit.
COST TO SERVE
Cost-To-Serve analysis helps to highlight the true total cost of reaching consumers in various area of a market and understand what contribution a particular area can have on the profit
The geographical perspective helps to understand where the market is actually. It highlights coverage issues and potentials help as well to define well-balanced distributor territory
Demand dynamics helps to characterize the demand behavior over time and foresee what cycles, patterns, trends are to be integrated to ensure appropriate distribution strategy
Supply Chain & Operations In Emerging Markets