The Supply Chain Consulting Group Develops Logistics Network Strategy For British Gypsum
Saint Gobain, a major international manufacturer and supplier of construction materials and products engaged The Supply Chain Consulting Group (SCCG) to support them on a major Supply Chain strategy project for their UK based British Gypsum business.
British Gypsum is a business specialising in the production and distribution of bagged plaster and wallboard products for the construction sector. The scale of the UK operation is substantial, with five large production facilities located in England that currently also operate as Distribution Centres (DCs). These on-site DCs are also viewed as potential capacity increase for the production facilities.
The project brief was to develop a range of logistics network strategy options that would allow British Gypsum to improve delivery service to their customers, while optimising production capacity and internal distribution flows. British Gypsum has a range of c.500 SKUs, leading to complex allocation decisions which must be optimised to maximise the cost-effective use of capacity.
SCCG approached this project using a range of tools to develop the strategic modelling options:
The SCCG in-house centre of gravity modelling tool was used to determine the optimal locations of new DCs and subsequently PTV route optimisation software to model vehicle/driver resources by routing inbound, outbound and inter-depot transfers for each scenario.
SCCG carried out an inventory modelling exercise to calculate the required inventory levels of each SKU, at each production site, to support the sizing of each distribution centre. SCCG used CAD software to create site layouts based on this inventory modelling.
SCCG used customised optimisation algorithms to develop network modelling scenarios that maximised overall factory production outputs and minimised factory to depot mileages. This modelling considered production line speeds that varied depending on raw material inputs and different options around production crew sizes.
Once different scenarios had been modelled using a range of tools, SCCG compiled the results and presented them back to British Gypsum in an options appraisal format. SCCG explained the trade-offs between scenarios considering a range of criteria such as: customer service benefits; operational costs; capital costs; production capacity benefits; ase of solution implementation.
Following the identification of a preferred scenario, SCCG undertook more detailed analysis to stress test the robustness of the proposed solution option. An example of this further analysis was a review of the loading times at factories and how this impacted on site movements at factory/depot locations.
SCCG provided a thorough review of supply chain strategy options to British Gypsum. British Gypsum could understand the pros and cons of each solution option and ultimately decide on how they wanted to proceed with their manufacturing and logistics strategy based on quantified outputs and comparisons.