Client Profile
A prominent manufacturer of women's sanitary pads in India with a nationwide distributor network and distribution centres across 17 key cities.
The company needed to maintain fast order turnaround while improving the overall efficiency and cost structure of its supply chain.
Business Challenge
The client had an extensive distribution network spread across 17 cities. While this network supported nationwide distribution, it also created significant supply chain costs.
The business faced several challenges:
- Maintaining 17 distribution centres increased operating costs.
- Inbound transportation costs were higher due to the large distribution network.
- Inventory-keeping costs were putting additional pressure on the supply chain.
- The company needed to maintain a 3-day turnaround time for at least 95% of orders.
- Reducing distribution centres without affecting customer service required careful supply chain planning.
- Projected inventory levels had reached approximately 18 lakh units.
The client needed to reduce costs while continuing to meet customer and distributor requirements.
AAJ's Approach
AAJ analysed the client's distribution network and supply chain requirements to identify opportunities for consolidation and cost optimization. The solution focused on restructuring the distribution network rather than simply reducing infrastructure.
AAJ implemented:
- Reduction of distribution centres from 17 to 7 strategically selected locations.
- Optimization of inbound transportation requirements.
- Reduction of inventory-keeping costs through a streamlined distribution network.
- Supply chain restructuring while maintaining required service levels.
- Inventory optimization to reduce projected inventory without affecting order fulfilment.
This approach allowed the client to simplify its distribution network while continuing to meet its 3-day turnaround requirement.
Results
The redesigned supply chain delivered significant cost and inventory improvements.
By reducing the number of distribution centres from 17 to 7, the client achieved more than ₹48 lakhs in annual savings across inbound transportation and inventory-keeping costs.
At the same time, the client maintained the critical 3-day order turnaround time for at least 95% of orders.
Inventory levels were also reduced substantially, from approximately 18 lakh units to 9.8 lakh units, representing close to a 50% reduction in projected inventory.
Key Outcomes
| Metric | Result / Improvement |
|---|---|
| Annual Supply Chain Savings | ₹48+ Lakhs |
| Distribution Centres | 17 → 7 Centres |
| Projected Inventory | 18 Lakhs → 9.8 Lakhs Units |
| Inventory Reduction | ~50% |
| Order Turnaround | 3 Days maintained for 95%+ orders |
Long-Term Business Impact
The optimized distribution network created a more efficient supply chain structure for the client.
With fewer distribution centres and lower inventory requirements, the company reduced ongoing supply chain costs while continuing to serve its distributor network within the required turnaround time.
The streamlined model improved operational efficiency, reduced inventory carrying requirements and supported more cost-effective distribution across the client's network.
