FORTE Lowered MEDRAD’s Freight Costs by 10.6 Percent & Labor Costs by 15.4 Percent

The Challenge
As a worldwide market leader in medical devices and services with products sold to hospitals and medical imaging centers in more than 85 countries, MEDRAD’s distribution and customer service levels were suffering.

The distribution network had expanded across Europe to meet demands while providing high service levels, but maintaining these service levels was difficult because of rising costs.

Overall supply chain costs would have to be reduced to remain competitive, but disparate distribution approaches added increased complexity and reduced efficiency, flexibility and agility.

The Solution
FORTE and the Network Analysis experts at the University of Cincinnati’s Center for Productivity Improvement used their expertise and real-world experience to determine the optimal network design for this global operation.

FORTE looked at sourcing locations, ports of entry, mode selection, and benchmarked inbound and outbound freight costs to assess which DC footprint and other network modifications could further reduce costs and increase efficiency.

The Results
Consolidated shipments decreased shipping and transportation costs, while reducing labor costs by 15.4 percent.

The reduction in order splits and reduced transportation rates from new locations lowered MEDRAD’s freight costs by 10.6 percent.

Improved facility design created higher storage density in the distribution centers and reduced the total square footage, which lowered facility costs by 20 percent.