Case Study: Transforming a CPG Supply Chain – Network Optimization, DC Relocation, and Measurable ROI

Introduction:

A leading global CPG brand engaged our team to address escalating supply chain costs, compliance penalties, and operational inefficiencies threatening service to some of North America’s largest retailers.Through a combination of network redesign, transportation strategy refresh, and inventory optimization, the project delivered measurable savings, improved service, and increased operational agility.

Background

The client operated a national distribution network with of three distribution centres serving a diverse mix of retail and wholesale customers.As order volumes grew and retailer compliance requirements became more stringent, inefficiencies in the existing setup began to erode margins:

• Transportation costs were increasing faster than revenue

• Late deliveries triggered significant non-compliance penalties from retail customers

• Warehousing costs exceeded industry benchmarks due to handling inefficiencies and high product damage rates

• Days-on-hand inventory levels were well above target, tying up millions in working capital

The company required a comprehensive solution that reduced costs while protecting service levels and brand reputation.

Our Approach

We undertook a comprehensive network analysis, incorporating shipment volumes, customer geographies, lead-time requirements, and total landed cost modelling.The project was executed in three integrated phases:

Phase 1: Network Redesign & DC Relocation

• Identified one alternative DC location closer to key customer clusters and major transportation hubs, reducing average lead times and linehaul distances

• Modelled inbound flows to optimise port selection and reduce drayage costs

• Built a relocation business case that balanced immediate savings with long-term scalability

Phase 2: Transportation Strategy Refresh

• Implemented a new outbound sailing schedule, improving delivery predictability to key retail customers and reducing late-arrival penalties

• Adjusted minimum order quantities (MoQs) to align shipment sizes with optimal freight cost per unit while maintaining service levels

• Led a transportation RFP process, securing improved carrier rates and enhanced service commitments for outbound lanes

Phase 3: Warehousing & Inventory Optimization

• Sourced a new 3PL provider with stronger operational KPIs, resulting in higher throughput and reduced damages

• Introduced process improvements in inventory handling, from dock-to-stock time to storage layout efficiency

• Redefined inventory strategy with improved demand forecasting, replenishment cycles, and safety stock parameters

The Results

Within the first year following implementation, the client achieved:

• 12% reduction in transportation costs

• 8% improvement in on-time delivery performance, eliminating a significant portion of non-compliance fines

• 7% reduction in warehousing costs, supported by efficiency gains and reduced product damage rates

• 17-day reduction in days-on-hand inventory, freeing up working capital for redeployment in growth initiatives

Lessons Learned

• Retail Compliance as a Cost Driver – For CPG companies, avoiding compliance penalties can deliver savings equal to or greater than transportation rate improvements.

• Holistic Change Delivers Greater ROI – Addressing network, transportation, and inventory strategies together ensured gains in one area were not offset elsewhere.

• Data as the Foundation – Advanced modelling gave the client the confidence to approve a major network change with clear ROI visibility.

  
  

Looking Ahead

The optimised network and updated operational playbook positioned the client to respond quickly to market changes and retailer demands. Building on the success of the new outbound sailing schedule, the next phase included integrating real-time visibility dashboards and predictive analytics to anticipate demand surges, port congestion, and seasonal delivery constraints before they occurred. These capabilities are now fully embedded in Origin North’s modular 4PL offering, enabling clients to proactively adjust schedules and maintain service excellence in dynamic market conditions.

Closing Line

This project underscores the value of combining cross-functional supply chain expertise with data-driven decision-making.The same approach now drives Origin North’s work across industries, delivering real-world solutions that reduce costs, improve service, and enable long-term transformation.