Reduction in warehouse expenses
Reduction in transportation costs
Increase in commercial margin
Increase in gross margin
The company, a leader in Mexico’s food distribution industry, partnered with Sintec Consulting to optimize its operations and reduce costs by 25% through a Post-Merger Integration (PMI) strategy. Despite the challenges of COVID-19 pandemics and operational complexities, the collaboration resulted in significant improvements in profitability and service levels.
“Navigating revenue decline and operational complexity, the company needed a strategic overhaul to regain control and drive profitability“.
The company faced significant challenges due to the impact of COVID-19, resulting in a 70% reduction in revenue and a decline in UTOP from 2% to -20.6% post-merger. The business also grappled with high operational complexity, managing over 4,000 customers nationwide, and struggled with a lack of standardization in purchasing processes. These issues were compounded by low service levels (< 90%) and high operating leverage in fixed expenses, creating a need for a comprehensive strategy to optimize costs and improve efficiency.
The company partnered with Sintec Consulting to enhance profitability after its integration through a Post-Merger Integration strategy. Sintec worked closely with the company to identify and implement initiatives that reduced operational costs and optimized supply chain processes for a successful integration.
The project led to significant improvements in various operational areas. A 15% reduction in warehouse expenses and a 20% decrease in transportation costs were achieved through network and service optimizations. The redesign of the supply matrix boosted the commercial margin by 2 percentage points, while cost-to-service reductions further improved profitability. Additionally, implementing the S&OP tool with Sintec’s expertise enhanced demand forecast accuracy, raising the fill-rate by 5 percentage points. These results optimized operations and strengthened profitability.
This is a brief summary of the case. If you’d like more details or want to learn how our solutions can help your business, feel free to reach out through our contact form.