The benefits of outsourcing warehousing and distribution

A global manufacturer of wireless handsets and accessories needed to improve service and reduce costs. Historically, its Canadian warehouse operations were split between direct-to-client (D2C) shipments for Canada’s largest wireless service provider, and bulk distribution to other national wireless providers. The operations also handled D2C orders from its Canadian e-commerce business.

Recognizing the need to improve efficiency and better manage costs, the client determined that instead of operating its own Canadian distribution centre, it would outsource warehousing and distribution operations.

SCI Logistics was selected as the supplier of choice to serve the Canadian market. The company engineered a solution integrating a full suite of supply chain services that delivered full visibility and life cycle product tracking of every handset at every stage of the supply chain.

The process of creating the solution began with SCI’s solutions team and the client working together to determine key requirements, including the complete transfer and outsourcing of the client’s GTA operations to the SCI Logistics Mississauga facility.

One of the challenges was integrating the solution with the wireless service provider, including adhering to its vendor managed inventory (VMI) requirements. For the VMI program, the client maintains ownership of inventory and fulfills orders passed to it by the service provider, billing them once shipment confirmation is received. VMI programs like this require extensive data sharing and reporting between all parties, which means systems need to be seamless, regardless of who owns them. The solutions team quickly assessed the operating and technology environments of each company, and built several interfaces between the manufacturer and the service provider systems to support all supply chain activities, including the VMI program.

The remainder of the solution involved designing and implementing freight management services, and assembly and kitting services. SCI Logistics also created cross-dock processes for moving product to other large client warehouses in the Canadian marketplace. And finally, SCI supported the client’s e-commerce offering in Canada, distributing product directly to consumers who ordered through the company’s website.

The key features of the solution include:

• Robust and scalable WMS/TMS.

• Complete interface with the client’s host SAP system.

• Real-time track and trace of inventory and order status via the web.

• Transportation management system that includes managing carrier claims on the client’s behalf.

• Direct access to reports.

Proof of the effectiveness of the solution is in the numbers:

• Achieved inventory accuracy levels of 99.99 per cent.

• On-time shipping of orders received before 4 p.m. exceeded 99.95 per cent.

• Dock-to-stock in four hours with ASN receipt.

For more information on the benefits of outsourcing warehousing and distribution, contact SCI Logistics. 

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