Rapid growth is a nice problem for any business, but when one of the largest fiber-to-the-home (FTTH) operators in Mexico started to experience significant problems with keeping up with that growth, they needed help.
The operator had turned to a third-party logistics warehouse management team to handle elements of their project but that provider could not keep up with the volume which was causing late shipments and delays.
Wesco had an existing relationship with the operator as a products-only supplier and started discussions with the customer on ways to help them streamline their planning, sourcing, inventory management and logistics.
Working with the customer’s purchasing and logistics teams, the team from Wesco team reviewed their current processes and put together a plan to optimize efficiency throughout their entire supply chain by implementing lean business practices from cost reduction to improved quality and efficiencies in delivery.
As is common for small operators or new entrants into this industry, the customer was challenged by large CAPEX investments to generate better coverage. Our approach was built around CAPEX removal and OPEX deferral. Since service providers and mobile operators in this region would rather negotiate directly with manufacturers than buy through distribution, Wesco’s innovative fifth-party logistics (5PL) approach would help build and strengthen relationships with the manufacturers so that both they and the operator would understand our complete value in the supply chain.
One of the largest FTTH operators in Mexico
Rapid growth led to an opportunity to re-examine supply chain operations
Supply chain, inventory management and logistics solutions
Greatly improved inventory and shipping efficiencies while reducing overall supply chain costs
Wesco was able to use their local expertise and innovative solutions to provide significant supply chain functionality to the operator, including:
- Inventory management
- Centralized purchasing
- Customer ERP integration
- Logistics coordination resulting in transportation savings
- Electronic order processing
- Established warehousing infrastructure
- Flexible supply chain solutions to scale up and down as needed
With the customer’s rapid growth and sheer order volume, efficient shipping had become a bottleneck. Within a year of Wesco’s involvement, their shipping efficiency increased from 77% to 100% for orders shipped within 48 hours. Urgent orders were also greatly reduced, going from orders being processed outside of business hours (nights and weekends) to 100% of orders processed during business hours, even as order volume continued to increase.
Wesco’s process-driven supply chain solutions delivered measurable business value, including:
- Annual savings in maintaining stock inventory
- Savings in urgencies protocol
- End-to-end visibility
- Considerable increase in shipping efficiency
- Significant cost savings in integrated services (kitting)
- Major cost savings in transportation services
- Dedicated warehouses and administrative staff
- Inventory efficiencies (counts, FIFO, performance KPIs)
- Technician efficiency due to on-time delivery of needed materials
- Capital efficiency due to Wesco-owned inventory and extended payment terms
- Reduction in overall supply chain costs
Historically supply chain management has been about increasing efficiency and reducing costs. While those needs haven’t changed, today’s supply chain management process means playing a front-and-center role in the customer’s entire process from beginning to end and having the agility to rapidly pivot and reconfigure when needed.
The financial capital that Wesco has built means that our supply chain capability is scalable to meet your needs. As a leading global supply chain solutions provider, we use inspiration to drive innovation. Every day we seek out opportunity in the unexpected to deliver creative approaches that help build, connect, power and protect our world.