Selfridges
Assessing central distribution strategy and selecting a logistics supplier
Having decided to outsource its warehousing, Selfridges required expert external support to confirm that the decision to outsource was correct, to verify that the tender process had been conducted thoroughly, review the selection of contractors and create a detailed mechanism for controlling costs in an 'open book' environment.
A key finding of PA's review was that the resources proposed by the bidders were set at high levels, due to over-conservative assumptions about productivity. Labour was one of the most significant costs in the contract, and by far the largest variable cost open to negotiation.
PA therefore built a spreadsheet labour model with sufficient detail to provide accurate outputs while making all key parameters and ratios clearly visible. This model allowed Selfridges and the preferred contractor to discuss and agree the labour requirements rationally and productively. The agreement will also help ensure that, as distribution volumes and requirements grow, there will be no disputes over costs and payments.
As a result, PA has helped Selfridges to put in place the distribution solution that will support its continued growth successfully.
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