Smith & Nephew Decrease Operating Expenses By 15% Using FORTE Business & Data Analysis

The Challenge
Smith & Nephew, a leader in the medical device industry, was experiencing significant yearly growth and knew their existing supply chain network capacity could not effectively support their long-term business plan.

They needed a partner that could work within strict government constraints and still provide viable options for future growth. Their Board requested a strategic evaluation of an internal vs. out-sourced distribution approach.

The Solution
FORTE provided recommendations on the existing distribution model and presented a range of options from complete in-house distribution to total 3PL distribution.

After a strategy evaluation with Smith & Nephew it was determined that in-house distribution, combined with better technology deployment and integration could deliver a 15% decrease in operating expenses over outsourcing operations, while minimizing risk.

The Result
The flexibility of Automation Director’s agent framework provided levels of throughput and efficiency not easily or cost effectively obtainable in other WCS systems, especially in environments constrained by strict government and customer regulations.

Smith & Nephew capitalized on their decision to keep distribution in-house and lower their distribution costs as a percentage of sales from 7% to 2.2% while increasing capacity by 50%. They could now fulfill customer orders in as little as 2 hours and showed a 15% decrease in operating expenses over outsourcing distribution operations.

“FORTE provides sound business/data analysis…their recommendations are usually based on their professional judgment rather than what they perceive we want to hear.” Smith & Nephew