Case Studies

Reverse logistics best practices in the entertainment industry.

Objective

Best Buy pays for all aspects of moving returns in the entertainment category from the store to the vendor in order to receive credit for the item. The objective for the project was to document the current return process, including physical flow, systems flow, and the costs incurred.

Approach

• Collect primary and secondary data
• Develop the as-is reverse logistics process
• Develop gap analysis between current situation and best practices

Outcome

• Defined recommendations for strategy development and process improvements

Supply chain safety stock analysis.

Objective

The CCE was challenged to come up with an innovative solution to address the bullwhip phenomenon between facilities within their CRM supply chain.

Approach

• Develop a Smart Pull Process that would account and compensate for the monthly, quarterly, and year end spikes that occur in the medical device industry
• Perform an inventory sensitivity analysis that compared the current safety stock equation versus the recommended CCE equation
• Redefine key performance metrics
• Develop an implementation roadmap

Outcome

• 12.2% savings in inventory investment and 23% improvement in service levels for the vertical suppliers
• Improved visibility, communication and organizational alignment, which allows the change from reactive to proactive management

Route profitability assessment.

Objective

To investigate the profitability of routes for which there was anecdotal evidence of unprofitability. While the client understood profit at the station level, gaining insight into cost at the shipment level remained a challenge.

Approach

• Develop a methodology to allocate cost on an individual shipment basis
• Apply methodology to individual shipments on a number of suspect routes
• Develop an Excel-based model to provide the client with an effective pricing tool

Outcome

• Discovered opportunities for improving client profitability by:
  • Improving pricing based on shipment type and routing
  • Maximizing flow through lower cost lanes
  • Identifying unprofitable customers
  • Optimizing network planning

Pricing strategy for ATV business.

Objective

To develop an in-house pricing capability for six segments of the ATV business.

Approach

• Scan the ATV industry using a four-pronged assessment: consumer, company, competitors, and channels
• Conduct primary research with consumers to quantify three key unknowns: brand premiums by segment, consumer demand curves for each competitor, and price elasticity for each brand in each segment

Outcome

• Client was given a generic pricing tool kit that can be used for future applications for both current segments and new undeveloped projects
• Team offered pricing recommendations on each of the six segments
• Finally, our scenario analyses and elasticity calculations offered fact-based explanations into some things the firm was already seeing develop in the marketplace