Client cases
Case stories - Operations


Outsourcing of technical and logistics services for an energy company

The client’s problem

The market for one of Europe’s major energy companies was undergoing substantial changes in the fuel types being used for power generation. As a consequence the business unit providing technical design and logistics services was challenged by a future demand for a wider set of services, a higher fluctuation in demand, and a risk of a higher cost level. Based on this the client was unsure whether it should continue to keep technical services internally or outsource the services to lower costs.   

Our approach

Oleto Associates was asked to come up with a clear recommendation on which solution would provide the best quality of service as well as being most economically viable. The first phase included a mapping of the technical and logistics services, activities, processes, FTE’s, organisation, cost structure, and an analysis of change in demand for technical services. Surveys, interviews, and preliminary analysis showed outsourcing technical and logistics services to be the most attractive scenario for the client. Based on this insight the second phase identified different outsourcing alternatives including transaction form, organisational setup, asset ownership structure, and type of supplier. Hereafter, the most efficient sourcing mix was recommended and selected. The third phase included a thorough supplier analysis including location, financial performance, services fit, energy sector experience, and none-competitor supplier. A clear supplier recommendation and a detailed implementation plan were delivered to the client as well as assistance in the execution of the actual transaction.

Value
delivered

Outsourcing the technical and logistics services enabled the client to become more flexible and reduce costs by 10-20% per year while preserving or improving service quality.  




Supply chain optimisation for a fast growing design company

The client’s problem

The client, a leading European design company had experienced steep growth in sales over a few years and had not aligned its organisation and processes to match this. Consequently, this had led to a decrease in performance caused by rising costs from supply chain, inventory and warehouse operations including losses from missing quantities, too much capital held up in inventories, lower flexibility, and low efficiency in in/outbound logistics. Thus, the client needed help to conduct a thorough supply chain assessment to address key issues and identify a selected set of improvement levers to match growing sales. 

Our approach

The approach was first to understand the client’s supply chain including current performance of warehouse operations, organisation of in/outbound logistic setup, and efficiency enablers. This was done by gathering documentation on people, technology, systems, and workflows, and assessing value leakage. A key insight during this phase was that the client’s supply chain processes were highly inefficient and broken causing significant losses on the bottom line, e.g., high amount of delivery errors, inquorate stock levels in the IT system, lack of product documentation, shipments not consistently tracked, inefficient organisation of warehouse, and lack of a sufficient warehousing system. In the second phase a prioritised set of improvement levers were identified including design of supply chain performance management and optimisation of the supply chain organisation, definition of responsibilities inside and outside the supply chain, selection and recommendation on supply chain IT systems. In phase three, a thorough implementation plan was crafted including shaping of detailed implementation initiatives.

Value delivered

Increase in logistics delivery performance, reduction in losses from missing quantities, 30-50% decrease in capital held up by inventories, and sufficient flexibility to scale warehouse operations and logistics to meet future growth in sales.




Streamlining operations at a global distributor and services company

The client’s problem

The client wanted to pursue a profitable growth strategy and to support this, a major IT-system investment was made to assist the operating processes. However, the operational model was not geared for this investment, which consequently was not exploited sufficiently. To capture the full potential and to support the growth strategy the operational model needed to be optimised and restructured so that it could deliver cost savings and capability improvements. The project also had to ensure a robust organisational structure and governance model for the future.

Our approach

Oleto Associates was engaged in a six months project to optimise key operational processes. Firstly, this included  drawing  a domain map covering all processes including supply chain, marketing, sales, procurement and planning, human resources and finance, and a systematic understanding of each division’s key activities, processes, capabilities, resources, costs, organisational structure, leadership and responsibility roles. Secondly, process improvement levers were identified and potential value improvement areas were estimated, prioritised, and consolidated. Organisational implications were derived from these process initiatives and a new governance and organisational model were designed including key management profiles, management committees, and KPI’s. Thirdly, an implementation plan and roadmap for process improvement initiatives and an implementation plan for the reorganisation plan were developed, launched, and rolled out.

Value delivered  

Over all, the client experienced significant cost savings of 15-20% and a significant reduction in delivery cycle times.




Optimising the operating model for a service provider in the health care sector

The client’s problem

An internal service provider offering full service of medical devices across several geographical locations in the health care sector asked Oleto Associates to define an overall development plan for the future. The client was responsible for a wide range of activities ranging from sourcing and procurement to operations and maintenance of medical devices, and was the result of a merger of several local service units. The development plan needed to focus on key process improvements and realignments, as well as defining the future target picture.

Our approach

The development plan had two overall targets. First of all it had to ensure that the business unit could meet a significant rise in future demand and that it could standardise service offerings and processes across product groups and customer locations. Secondly the client’s service delivery model had to be optimised including significant changes to the sourcing mix, further exploitation of economies of scale, and optimisation of internal processes and collaboration models. The initial phase focused on gathering a detailed fact base on the current situation and collecting service requirements from internal customers including a review of key process efficiency. In the second phase, the target picture for the strategic delivery model was defined including scope of service offerings, collaboration models, process interfaces, sourcing of products and workforce, organisation, implications for the future cost level and potential for cost savings levers, e.g., optimising processes and taking advantage of synergies and economies of scale. In the third phase an overall development plan for the following years was delivered including a detailed action plan focusing on critical initiatives for the first year. 

Value delivered

Aligning and optimising service offerings and processes across all locations serviced by the client enabling the client to meet future demand while also delivering 5% in annual cost savings.


© Oleto Associates  •  Amaliegade 8  •  DK-1256 Copenhagen  •  Denmark  •  Tel. +45 3333 8400  •  [email protected]  •   Terms of use  •   Privacy statement