Omnichannel distribution network design

By | Casestudys, Clientcases | No Comments

What were the client’s needs:

Due to crucial organisational changes, increasing online sales volumes, and continuous developments in the commercial propositions and product range, there was an apparent need to restructure the distribution network in order to:

  • Accelerate the desired commercial proposition
  • Support the omnichannel fulfilment ambition (for example with entirely interchangeable online/offline distribution channels, shop pick-up, shops storage)
  • Improve the efficiency, costs, and capacity of the distribution centre

What was our approach?

  • In collaboration with the management, we established the scale of the commercial proposition in order to facilitate it by deploying the new distribution network (e.g. the number of SKUs, channel mix, product features)
  • Development of a growth model for logistic volumes
  • Assessment of the current distribution structure, identification of problems/bottlenecks, and the execution of a fit-gap analysis with the growth model
  • Development of future warehouse layout, automation options, detailed processes, and IT/WMS requirements
  • Development of the business cases for every scenario, including the required investments and reduction of costs
  • Facilitating boardroom decisions

What did we achieve?

  • We developed a solid omnichannel concept for the distribution centre where inbound, storage, and picking activities for online and offline flows are integrated and supported by automated processes
  • Substantial cost reduction of 18-20% on the total distribution costs
  • The distribution centre has been structured in such a way that it will not just facilitate the current commercial ambitions but also those in the future

What was the client’s experience:

IG&H pools thorough logistic expertise and combines this with a pragmatic approach for an effective decision forming process based on facts.

4.8% profit margin increase and data-driven approach for leading logistics provider

By | Clientcases, News

What they wanted
Our client, a leading logistics provider, had an urgent need to increase margin due to a sudden rise in operational costs. The company, which provides logistics services to over 30,000 customers, has a historically dispersed and fragmented commercial setup. Using differentiated approaches to tariffs components, it substantially lacked transparency on how prices were set across a mix of specific services (e.g. delivery and special parcels) provided to its customers. Furthermore, prices had recently been raised, requiring a new approach to increase prices again.

IG&H was asked to:

  • Leverage detailed insight into existing customer-level pricing and setup.
  • Develop a data-driven pricing strategy, starting with an initial campaign where intelligent logic, benchmarking, and margin analyses are used to introduce a more logical and sound argumentation for price increases.

What we did
Our first major step was to create a bottom-up pricing mapping based on the most important service offerings and surcharge components on a customer-by-customer basis. Additionally, we identified operational and contractual KPIs that could provide a basis for customer-specific price increase suggestions and argumentation. Following this, we classified customers to compare product mix and price components like-for-like. Based on previous insights, we developed a logic to intelligently suggest new prices per customer, targeted towards a top-down 5% margin increase.

The second step involved the launch of an interactive comprehensive dashboard for 140 sales professionals. The goal: benefit from the newly gained insights and enable simulations of the proposed price increases. A thorough argumentation for the negotiations was storylined to support the salesforce. This was further elaborated upon during a two-day sales conference, which we also organized to further introduce the negotiation methodology based on pricing evidence and to increase suggestions made by the tool. Furthermore, we ensured that the salesforce received hands-on training and practiced with the tool, providing a solid foundation for implementation in the field.

Our third step consisted of tracking compliance as well as monitoring progress of the entire negotiation process down to the customer and product levels. This provided a foundation for increasing the effectiveness of sales professionals in achieving their goals. Also, it allowed for timely steering on different management levels. Finally, it enabled organic testing of pricing elasticity and implemented logic to refine our proprietary setup in the future.

What we achieved
Within a short, five-week timeframe, we went from collecting pricing-relevant data from various sources to delivering:

  • A 4.8% profit margin increase.
  • Institutionalization of a more sophisticated, data-driven commercial approach to pricing and negotiations.
  • Increased awareness of the power of data science in an inherently complex setting. This was confirmed by a continued engagement in operations. Also, we kept building the in-house capability for this client.

What they said
“IG&H is a very pragmatic and strongly output-oriented consultancy with a strong data science capability. The consultants rapidly understood our requirements and developed an actionable approach, perfectly integrated with our teams and organization, and delivered great results in a very short period of time.”

Predicting sales using data

By | Casestudys, Clientcases

What they wanted
For our client, a large non-food retailer, promotional folders are essential: a significant revenue share originates from folder products. But sales forecasts were on average off by 100% (volume weighted MAPE) resulting in excess stock, tied up working capital, sharply increased operational complexity and added discount pressure. Our client wanted to move away from an opinion and anecdotal-evidence based forecasting system toward a rigorous historical data driven estimate.

What we did
Using our proprietary data engineering algorithms we started by unifying data from 35+ disparate data sources into an automated and centralized database with a complete end-to-end product level view incorporating 100+ product characteristics, e.g. size, color, and type.

Using our database structure we deployed a collection of gradient boosted regression trees and additional statistical techniques to make product-level predictions of folder sales. We improved forecast accuracy by 60 percentage points. Key predictive variables were seasonality, markdown amount, price, article category and location of the product within the folder.

What we achieved
Given the significant improvement in forecast accuracy, our algorithm was implemented in core business processes. Today, roughly 80% of our model forecasts are used as a final sales estimate. Because of this, the supply chain management team can focus its attention on the remaining forecasts where the math just doesn’t cut it. In these predictions the value is provided by retail sector insidership and other unique human insights.

Our applied combination of human expertise and mathematical precision results in a reduction of 22% in handling complexity, a 20% reduction in excess stock, and – most importantly – the start of a data driven culture.

What they said
“This is pure gold.”

 

Taking master data management capability and awareness to the next level

By | Casestudys, Clientcases

What they wanted
For its new online platform, this organization wanted to have all product data available and improve data quality. Furthermore, a shift in mindset was required to become data-driven: the value of data should be seen as a relevant topic within commercial business lines and commercial programs.

What we did
We adopted a two-phased approach: while building the fundament, it was also possible to realize short-term impact. Our program was set up around four must-win battles with high client involvement. There was approximately 50 FTE involved, and we needed to enable a cultural change. Furthermore, we encouraged the business through a hands-on supportive approach, creating a highly constructive atmosphere. For example, we organized many workshops and sessions. Finally, our Agile approach provided a solid ICT fundament, focused on prioritized deliverables in sprints. This was combined with the realization of quick wins in the form of process improvements.

What we achieved
Data processes have gone live and product data were 100% ready to enable the online platform. Revenues were around €1 billion in 2015. Four key processes have been redesigned and implemented, resulting in a uniform way of working. Moreover, reports are being generated, and there is reporting governance: operation is steered through both operational KPIs and data-quality KPIs. Also, a clear cultural change has been established, facilitating a data-is-revelant-for-all-attitude.

What they said
“IG&H gave structure to the approach and thus increased throughput significantly. It contributed considerably to establishing the necessary cultural change and attitude towards data and data quality

Strengthening #1 market position of GAMMA in a fast-changing retail landscape

By | Casestudys, Clientcases

What they wanted
GAMMA has been dealing with a >20% shrinking market since 2009. Furthermore, new competition – from online to discount to foreign traditional players – has been entering the market from all directions. Meanwhile, the organization needs to meet fast-changing consumer expectations and needs all the time. The question was: “How do we ensure a future-proof business considering these circumstances?”

What we did
Based on data-driven market and customer insights, we realized a clear repositioning by placing focus on where to dominate, differentiate, or follow the market. Moreover, we translated the positioning into assortment strategy and category business plans. Together, we also redefined and simplified 23 functional categories, bringing them back to 6 customer-oriented experiential worlds. Finally, marketable service propositions were defined, followed by an Agile implementation approach.

What we achieved
We have realized a repositioning strategy in a mere 50% of the regular lead time. The assortment strategy has been renewed, leading to 8% revenue growth. Furthermore, the marketable service propositions de-risked the potential market share decline. Also, the first result of the pilot store has been a revenue increase of x%.

What they said
“We feel that we have full ownership of what we have co-created. IG&H has taken the lead by setting a direction, but has also adapted by listening carefully at the same time. Working with them on the project has been a pleasure.”

UMC: performance-driven care administration

By | Clientcases, Healthcare

What they wanted
Solid business operations start with a well-performing care administration. Like many healthcare institutions, the UMC struggled with burdens: there were many correcting tasks for the care administration, registration tasks for specialists, control tasks required by the insurer, and change implementation tasks imposed by the government. To depart from all this, the care administration had to switch from stopgap solutions to improvement. The goal: timely, correct, and complete registration at the source. This would allow the institution to get in control and lay a foundation for horizontal monitoring, which means that the insurer performs checks beforehand instead of afterwards.

What we did
Together, we conducted a data analysis to identify the main sore points. Subsequently, we set up an audit program for improvement projects, which we rolled out to the departments. Then, we created a process design – new in terms of content – and set up the Lines of Defense model. Management information was organized using correct and supported performance indicators. Finally, we established a program organization with stand-up and day start meetings, as well as training courses.

What we achieved
With our help, the UMC has taken a major step towards departing from correcting tasks and creating an optimal chain of registration. We created a supported Lines of Defense model and ensured commitment to registration securities. Furthermore, we introduced a new way of working, tightening priorities, project activities, and the allocation of tasks. Also, the focus has shifted to transparent communications on processes and substantive matters. Moreover, openness and feedback have improved collaboration.

What they said
The Ministry of Health, Welfare, and Sport has made this project an exemplary case for other care administrations. At the Congres Horizontaal Toezicht Zorg (congress for horizontal monitoring in healthcare), the case was highlighted as an example of success. The client’s feedback: “In terms of quality, IG&H has done an excellent job providing methods that we can apply in practice. IG&H made a difference. It has been tangible in the solution they offered, but also in its reception and the way it works in practice. The organization has noticed a positive energy boost.”

Successful implementation of experiments into business

By | Clientcases, Organizational transformation

What they wanted
This organization needed experiments to be successfully implemented into the business.

What we did
We introduced an Agile way of working. In addition, we provided coaches with training and guidance, teaching them and the teams a range of skills. Moreover, the standard innovation process was upgraded using clear steps for each stage.

What we achieved
The experiment teams’ delivery has become more predictable. Their ability to think ahead has improved, and they highlight complexity. Furthermore, both the business and partners come on board sooner and in a better way to prepare a smooth implementation stage.

What they said
Some client quotes: “I have become a more effective coach.” “We reflect on future important matters to a greater extent.” “IG&H left us with something truly valuable. This place is better than it was several months ago.”

UMC: setting up an Integrated Practice Unit

By | Casestudys, Clientcases

What they wanted
In the UMC, a variety of specialties work on the locomotor system, both in terms of providing care and performing research. The university hospital wanted to unite several specialties, centering them around the patient. The goal was to develop and apply innovative treatments for complex knee problems.

What we did
Together with the specialists involved, management, support staff, and paramedical employees, we created the proposition and the organizational model. We used this to connect various specialties and interests. Moreover, we drew up a convincing business case. With this solid foundation, we quickly started ‘Launch & Learn,’ the first multidisciplinary pilot in the outpatient department.

What we achieved
Within three months, the pilot has been scaled up to a mature, busy, and leading practice. Internally, the department has become exemplary for multidisciplinary collaboration on care, research, and innovation. It is also one of the most cited best practices in the hospital. Additionally, patient numbers and patient satisfaction have increased significantly.

What they said
“Adopting this way of working was a long-cherished wish and ambition of us. We had made drafts and explored the possibilities before – also with the support of other agencies. But without IG&H, we never would have been able to actually realize our plans.”

UMC: healthy financial function for performance management

By | Clientcases

What they wanted
The UMC required a good instrument and policy to connect cost and revenue to performances. Moreover, it needed an improved financial function with reliable management information.

What we did
Through an Agile way of working, we provided the design, decision-making, and realization for a suitable management model. We also created a policy for performance-based funding. To support it, we realized a performance-based funding system including an adjustment to the planning and control cycle. In the process, critical performance indicators were set up at the departmental level.

What we achieved
The organization’s business operations have been strengthened, both in terms of instruments and behavior. The purpose: increasing the value of care.

What they said
“The people working at IG&H are inspired professionals who help their client reinforce itself.”

Large Dutch bank digitalizes mortgage processes

By | Banking, Casestudys, Clientcases

What they wanted
“Consumers demand speed and convenience when applying for or modifying a mortgage. Having insight into and control over the mortgage process is increasingly important in this regard. To remain competitive, we must respond to these needs. At the same time, we are faced with the challenge of complying with the ever-tightening (European) regulations. What we want is to be ready for a mortgage market that will change radically as a result of digital developments!”

What we did
As a forerunner in innovation, we use our proven approach to set organizations and the mortgage sector into motion. For this bank, we translated the view on source data usage into a new service provision concept and a setup of underlying processes. Then, we accelerated the implementation using our toolset, which we have started to build since the launch of our initiative ‘Handig!’ (Handy!). In addition, we ensured that the organization was on board by working in an Agile manner.

What we achieved
With our help, the organization has adopted a data-driven way of working. To better serve customers, it now uses data from reliable sources instead of paper documents. Moreover, consumers enjoy more speed and convenience. Submitting an application is simple, and they get a definite answer within one day 80% of the time. As a result, the decision on buying a house is an easy and fast one to make, which has led to an increase in revenue. Moreover, focus has been placed on efficiency and customer-orientation. Mortgage applications have increased by 20% in three months, while cost has decreased by more than 50%. In addition, acceptance has become much more reliable: the risk of fraud has reduced significantly.

What they said
“IG&H had the vision, knowledge, and experience to help our organization digitalize the mortgage process. We are now a frontrunner in a radically changing mortgage market, and we increased our market share by 10%!”