Data Driven Supply Chain was engaged by an agricultural segment leader to analyze their first-mile network after COVID-19 disruptions. Through high-touch interaction with the client, Data Driven Supply Chain (DDSC) pinpointed the precise options the company needed to move forward with a growth plan.
Background
When container ships began backing up at the ports of Los Angeles and Long Beach, California as a result of the COVID-19 pandemic, countless shippers were forced to make difficult decisions around ocean freight.
Facing disruptions at LA/LB, an agricultural segment leader with a national customer base began importing product from East Asia into ports on the Gulf of Mexico and East Coast. With LA/LB stabilizing, they faced questions about the future first-mile strategy.
With projected double-digit annual growth, company leaders wanted help in weighing the relative costs, risks, and advantages of resuming the use of West Coast ports, either exclusively or in addition to the East Coast ports currently in use. Company leaders were also interested in evaluating a make/buy strategy around some of their key products.
Considerations
In addition to the cost, service level, and inventory impacts of a differentiated first-mile strategy, company leaders needed to consider the organizational impacts of changing their first-mile strategy and a make/buy strategy. Transportation management relationships would need to be established or solidified for new lanes. Safety stocks would need adjusted due to new inbound lead times. Additionally, customer service levels would need to be carefully monitored.
The Data-Driven Supply Chain Approach
Engaged to develop a customized supply chain model (a “digital twin”) to evaluate options, the DDSC team went to work.
In contrast to some traditional supply chain consultants, the DDSC team’s high-touch, iterative approach involved creating a “first draft” model, followed by approximately two dozen additional scenarios based upon client feedback and requests. After completing these scenario models over the course of a few weeks, DDSC created a customized dashboard that displayed results in varying levels of detail.
Outcome
As a result of this interactive, bespoke process, the client established a unique first-mile network that balanced its needs for cost, risk, and customer service level. After the engagement, an interactive dashboard was provided to the company, enabling them to continue evaluating and adjusting procedures long after the consulting engagement was concluded.