Almasy Consulting: Case Experience
Distribution and Transportation

















The following case descriptions provide details of key questions, issues and challenges that faced our clients. The level of the sponsoring client is indicated. Specific outcomes are provided where possible and when not in conflict with client confidentiality.

Office Supplies Retailer – CEO
How could the first office supplies superstore design a logistics system to cope with its planned growth? Would it be better to create a centralized Distribution Center that serviced the majority of its local stores needs or rely upon direct to store delivery from suppliers? What were the pros and cons of double handling? What would be the effective travel radius for the Distribution Center and how far into the future could capacity be forecast? Outcome: The success of the office superstore concept exceeded all expectations and the distribution system to supply it needed to be both more robust and flexible than anticipated. Centralized Distribution Centers became a key part of a "break-bulk" concept for store delivery. In addition, since copier and printer paper was their highest volume product, a cut-stock paper operation was built into the distribution design.

Forest Products Company – VP, Planning for Office Products
Could a leading wholesaler of office suppliers pursue dual distribution, i.e. selling at one level of the distribution chain (wholesale) while moving part of the business to another level (retail)? What conflicts were created when the firm began to compete with its contract stationer customers? Outcome: The project recommended the dual approach as the only viable way to bypass the functional pricing constraints of other office supplies manufacturers. In addition, it allowed the firm to serve major institutional customers more effectively and segment its market by customer size and cost to serve. The operation doubled its market share within three years.

Kuwaiti Holding Company – CEO and EVP, Operations
Could a Kuwaiti holding company successfully invest in automotive distribution in the United States by acquiring and integrating 11 companies and 22 warehouses over a three year period? Could it also launch a retail product strategy to compete with AutoZone® and Pep Boys? How could store design, location, and systems be developed to permit higher service levels than competition? Would a brand identity program create greater loyalty among independent jobbers? Outcome: The project scope extended over five years from initial concept on a kitchen table through the last company purchase and integration. Independent operations were integrated under the Bumper-to-Bumper® identity program with unified information and point-of-sale systems. Upon the project’s completion, the company was the third largest automotive parts warehouse distributor in North America.

UK Conglomerate – General Manager, U.S. Operations
How could one of the U.K.’s largest resellers of automobiles and parts successfully merge two recently acquired automotive warehouse distributors in California? Could overlaps in customers and competitive product lines be resolved without major losses? Would new marketing and identity programs help increase market share and customer loyalty? How could "share of wallet" be used to establish the best customers and help focus resources? Outcome: Over a four year period, various projects and programs supported the integration of the two operations. Customer analysis indicated that customer profitability was directly linked to percentage of business. Various loyalty/retention programs were developed to increase this percentage, including: computer ordering systems, brand identity, cooperative advertising, private label products, and purchase incentives. Over the four years, market share increased by 50% and net profit margins grew from 4% to 7%.

Canadian Courier Company – CEO and CFO
How could Canada’s largest courier use cost information to help its return to profitability? Would an activity-based customer cost system be accurate enough to guide contract negotiations? Would prices created by such a system "stick" in a competitive marketplace? Outcome: The project produced the design and tested architecture for the new cost/price system. Analysis of the top 600 customers indicated which were unprofitable and what price increases were needed. The annual customer contracts were renegotiated based on this information. In combination with extensive cost cutting, the new pricing system resulted in the firm's most profitable year.

Paper Distributor – VP, Industrial Packaging Division
How could one of the leading distributors of paper broaden its market definition to include packaging supplies and equipment? Assuming a dominant share position was possible, what new logistics organization was necessary to link five quasi-independent merchant houses? Would a single brand name help centralize sourcing and distribution functions and increase overall margins? Outcome: The project identified substantial cost savings that had been missed when each branch purchased on its own. Consolidated purchasing produced an increase in gross margin from 18% to 19%. The reorganization of the branches under a single name yielded additional cost savings in overhead, distribution, and marketing costs.

Food Company – Division Executive, Processed Foods Division
Could a logistics system designed in the nineteenth century and built around old shipping concepts be redesigned to take advantage of new transportation flows and systems? Would the freight-adjusted pricing system that created competitive disadvantage on the East Coast reflect actual cost structure? Would customers accept the new pricing system or switch to competitors? Outcome: The project created a new structure of pricing regions and an algorithm for setting terms, conditions, and shipping charges. The impact on all major customers’ net profitability was analyzed and their reaction to the new pricing forecast. The pricing approach was accepted by the industry at large and accounted for a significant increase in divisional profits.

Office Furniture Company – CEO
How could the world's largest office furniture company serve small business customers who wanted rapid delivery of off-the-shelf office furniture products? Could a logistics system be designed with a distribution partner that guaranteed 48-hour turnaround? What constraints, measurements, and contingencies would need to be built into such a partnership that could ensure that the company’s objectives were met and that long term strategies were not compromised? Outcome: The project included analysis, program development, pricing, and negotiation with the distribution partner, who was selected to provide national coverage for the 250 high volume products, some of which were outsourced. The launching of this initiative enabled the company to serve an entirely new set of customers with a complete different supply chain and product set.

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