Establishing a Distribution Footprint and
Enhancing Business Margins for a Venezuelan CPG
Company
Problem:
A $2 billion Venezuelan CPG company depended on a third-party distributor for US operations.
The company aimed to create its own distribution network to improve profitability and delivery performance.
Lambda was tasked with developing a 5-year greenfield distribution strategy and a network roadmap.
Solution:
Demand Assessment: Analyzed customer demand and forecasted growth over five years.
Scenario Simulation: Used Optiflow to simulate scenarios with 2 to 7 distribution centers (DCs) across 10 potential locations identified via center of gravity analysis.
Optimization: Conducted sensitivity analyses, including mode shifts (e.g., truck to rail), to evaluate cost and service level impacts.
Recommended Configuration: Determined that a network with 5 DCs struck the right balance between transportation and warehousing costs.
Result:
Proposed a network with optimized DC sizes and locations.
Identified logistics cost savings of up to 10% through truck-to-rail conversion.
The strategy ensured scalable operations for future growth while enhancing customer service and reducing costs.
