Logistics Network Strategy - Case Study
Company and Project Background
Salvation Army Trading Company Ltd (SATCoL) is the trading arm of The Salvation Army. SATCoL actively encourages the reuse and recycling of donated clothing and other household items through its 240 charity shops and donation centres, and a nationwide network of clothing banks. Each year, SATCoL diverts over 250 million items to good uses, including over 65,000 tonnes of textiles.
With the support of the British public, SATCoL has donated millions of pounds to The Salvation Army to help its work with vulnerable people in the UK (over £80 million has been donated in the last ten years). Salvation Army Trading Company Ltd is a registered company (02605817). The Salvation Army registered charity numbers in the UK are 214779, 215174 and in Scotland SC009359, SC037691.
SATCoL’s logistics operation involves a fleet of 250 vans and 80 arctics that transport donations to sites in Kettering, Winchester, Wellingborough, and Wollaston. The future strategy involves leveraging the investments made in the Kettering Processing Centre and optimising the logistics network to support growth.
Objectives of the Project
The Supply Chain Consulting Group (SCCG) was engaged by SATCoL to review their logistics network and provide recommendations for improving operational efficiency and accommodating future volume growth. The key objectives included determining optimal site locations, evaluating cost-effective options, assessing the impact of automation and analysing changes in donation disposal.
Challenges in the Project
The project encountered several challenges that required careful consideration and analysis. These included the forecasted growth, potential changes in donation disposition and two site leases expiring in the next period. The complex nature of SATCoL ‘s operation required careful consideration of various factors such as stock data, seasonal fluctuations, growth projections and regional collection requirements.
Initial Situation and Solutions
The consultants conducted a comprehensive analysis of SATCoL’s current network operations, collecting and reviewing operational data. Geographical modelling took place to identify optimal site locations and the costs associated with different hub configurations and sorting depot options were evaluated.
The consultants also assessed the impact of incorporating larger capacity vehicles and the handling of Fibersort™ activities. Warehouse space requirements, operating costs and capital investments were considered in the network options model.
Outcomes
Through the analysis and modelling performed by SCCG, several recommendations were made to optimise SATCoL’s logistics network. These included reducing the number of hubs in certain regions, incorporating larger capacity vehicles, handling Fibersort™ activities and not moving the sorting depots. The recommendations aimed to achieve cost savings, improve operational efficiency and accommodate forecast growth.
The final report provided a roadmap for implementation, considering existing lease expiries and other critical factors. The recommendations aimed to enhance SATCoL’s logistics footprint and support SATCoL’s goal of increasing its turnover, while efficiently managing its network operations.
Conclusions
Through the collaboration between SATCoL and SCCG, an in-depth review of SATCoL’s logistics network was conducted, resulting in actionable recommendations for improving efficiency and accommodating future growth.
The optimised network model, cost analysis and proposed roadmap provided SATCoL with valuable insights to enhance their operations, streamline processes and support their mission of raising funds for The Salvation Army charity.
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