Raab Karcher

Supply Chain Modelling Helps Reduce Costs

Raab Karcher, is a major builders merchant in Germany, part of the French Saint-Gobain group that includes Jewsons in the UK. As a result of a project undertaken for Jewsons, the company asked Davies & Robson to assist with a supply chain infrastructure study.

The available distribution centre resources comprised a Raab Karcher NDC used for the supply of slow and medium moving lines to branches, and two former Keramundo distribution centres, one north and one south. By the time Davies & Robson was commissioned to look into the infrastructure, a hybrid supply system had developed.

Overall, Raab Karcher stocks more than 15,000 lines but, as part of an earlier review, had classified and segmented branches into ‘A’, ‘B’ and ‘C’ outlets, based on size and stock range. This allowed the possibility for ‘A’ outlets to have a distribution function, to serve geographically proximate ‘B’ and ‘C’ outlets, in addition to the main distribution centres. But would such an idea help generate the cost savings that Raab Karcher sought? If so, which ‘A’ outlets should act as stocking centres for which ‘B’ and ‘C’ outlets? And how would the overall system work?

Davies & Robson was asked to assist in this evaluation by modelling the current and future potential supply chains. To evaluate supply chain alternatives, Davies & Robson specialists conducted a supplier modelling exercise – a major simulation accommodating the wide and complex set of cost variables associated with delivery distances and quantity discounts. These variables were analysed for each potential supply chain and highly sensitive solutions were found.

The exercise resulted in an optimum supply chain infrastructure solution, presented to and accepted by Raab Karcher. The chosen solution is now being implemented.

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