Supply Chain Network Optimization & 3PL Selection for a Global Manufacturer
A global performance gear manufacturer needed to unify its U.S. logistics network after years of acquisitions. How Leverage helped a global performance gear manufacturer consolidate nine distribution centers into two, select a 3PL partner, and identify $19 million in projected five-year savings.
$19M
Projected 5-year savings
$7.2M
In capital avoidance
$12.9
5-year NPV improvement
9 to 2
Node distribution model
Client
Global performance gear manufacturer
Sector
Retail & E-Commerce
Location
US
Scope
Network optimization and competitive 3PL selection
Services
Network Design & Planning; Logistics Procurement
Years of acquisitions left behind a fragmented, high-cost distribution network.
After a series of acquisitions, a global manufacturer of premium outdoor and technology brands was operating nine independently managed U.S. distribution centers. The network carried more than $46 million in annual fixed costs, with overlapping infrastructure, fragmented systems, and inconsistent service.
Leadership wanted a more unified, scalable network with a two-node footprint. It also needed to determine whether an insourced, hybrid, or outsourced operating model offered the best combination of cost, service, flexibility, and capital requirements
A network built through acquisitions, rather than designed as one.
What stood in the way
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Duplicated infrastructure
Nine independently operated facilities drove overlapping fixed costs and complexity. -
Fragmented visibility
Disconnected systems limited inventory visibility across the network. -
Footprint out of alignment
Distribution locations did not adequately reflect customer geography, contributing to service inconsistency. -
Unresolved operating-model decision
The company needed to compare insourced, hybrid, and outsourced options on a consistent basis. -
Limited Decision Governance
Future logistics decisions required a more transparent, repeatable approach.
What we were asked to deliver
-
Standards with no room to miss
Healthcare distribution carries requirements that are not negotiable and not forgiving of late discovery. -
Standards with no room to miss
Healthcare distribution carries requirements that are not negotiable and not forgiving of late discovery. -
Standards with no room to miss
Healthcare distribution carries requirements that are not negotiable and not forgiving of late discovery. -
Standards with no room to miss
Healthcare distribution carries requirements that are not negotiable and not forgiving of late discovery.
Three operating pathways. One quantified decision.
Leverage combined network scenario design, five-year financial modeling, and a competitive provider process to evaluate the trade-offs and recommend an operating model.
Strategy and scenario design
Evaluated three operating pathways—insourced, hybrid, and outsourced—against cost, service, and risk considerations. Assessed how each model could support a streamlined distribution network and provide flexibility for future growth.
5-year financial modeling
Developed a five-year total cost of ownership model to compare the financial implications of each operating structure. Analyzed operating costs and capital investment requirements to identify savings opportunities and improve financial flexibility.
Competitive 3PL RFP
Led a structured RFP process involving leading global logistics providers to evaluate outsourcing options. Compared provider proposals against operational requirements, cost competitiveness, and the client's long-term scalability needs.
Business case development
Consolidated the analysis into a quantified business case comparing the three operating models. Recommended a fully outsourced, two-distribution-center network that offered the strongest balance of cost savings, scalability, and flexibility.
A more efficient distribution network, with $19 million in projected five-year savings.
What the client got.
Two-node outsourced network
Selected a leading global 3PL provider and consolidated from nine distribution centers to a two-node model.
$19M in network savings
Financial modeling estimated approximately $3.8 million in average annual P&L savings over five years, versus the baseline.
$7.2M in capital avoidance
The recommended outsourced structure was expected to avoid $7.2 million in capital investment.
$12.9M 5-year NPV improvement
The business case estimated a $12.9 million NPV improvement for the redesigned network
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