Impressive results through nearshoring


Supply chain strategy

Challenge

A Swedish multinational company handling seasonal items with production in China and a central warehouse in Sweden had issues with supply chain efficiency. The move to China was made a couple of years ago, due to expectation of a lower cost. MYSIGMA was assigned to evaluate different sourcing options to validate this and/or to suggest a better set-up.

Solution

The decision was taken to move assembly operations to Europe, thus allowing higher responsiveness at the same time the cost benefits of production in China was retained. The bulk of the analysis and implementation was awarded to MYSIGMA.

Impact

By moving final assembly to Europe and changing some supply chain rules the following was achived:

  • Higher resource utilization lead to a cost saving of the transferred components with 20%
  • Increased inventory turnover from 2,5 to nearly 9!
  • Drastically reduced cost of damaged goods and poor quality
  • Reduced lead time, from 16 to 3 weeks, and increased flexibility