Southcorp Wines Europe Ltd - is a major Australian wine producer and distributor. Key brands include Penfolds, Rosemount Estate and Lindemans.

the brief - the European operation is managed from the UK and at that time, was supported by two contractors each providing bonded storage and distribution. Large consignments are shipped in container loads from Australia direct to clients (such as supermarket RDC's). Southcorp was concerned to plan and manage the growth of the business within the UK and Europe in the most effective manner and therefore were keen to formulate a Logistics Strategy.

the approach - the larger of the two contractors, from their base in Kent, provided a comprehensive service involving receiving shipments from Australia, storing bulk pallets and despatching consignments to customers as well as added value services such as re-labelling and re-packaging. They also provided a complete transport and delivery service to customers. The other contractor provided a more limited service in Belgium where they received stored and despatched consignments using hired carriers. A complication was that Australia despatched all goods as un-palletised cartons slip-sheeted in containers, whereas most supermarket customers would only accept palletised deliveries.

We carried out a careful investigation of the existing contract operations including a "cost per case delivered" analysis which compared the existing contractors' performance with a theoretical cost generated by our distribution planning software (Dips). Various options for service provision were examined and modelled and it was established that the most effective configuration was to distribute to both the mainland of Europe and the UK from a base in the south of England. Following on from this, potential contractors for both storage and transport were evaluated and options costed to the level of establishing annual operating budgets for dedicated and shared user options.

the result - a new distribution partnership was negotiated with the original UK contractor (Lenham Storage) to provide a complete UK and Mainland Europe distribution service from their base in Kent which allowed the Belgian contract to be terminated. In addition to the conventional distribution, Lenham also intercept the direct shipments and palletised the cartons for final delivery.

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