Case Study Food manufacturer relies on greenfield and brownfield optimizations
PSIglobal, the solution for supply chain management design, is used for various calculations.
Founded in the 1960s, the company has evolved over the decades into an international food manufacturer with more than 10,000 employees. In Europe, the group has approximately 30 brands and various production sites and sales companies.
- Industry: Food manufacturer
- Employees: > 10,000 worldwide
- Customer since: 2013
- Deployed software: PSIglobal
- Type of optimizations: Greenfield, Brownfield
Mastering challenges
To move the company forward and strengthen its position on the European market, expansions and corporate acquisitions are part of the standard corporate policy for the food manufacturer. The continuous expansions create complex logistics networks that need to be reviewed from time to time for optimization potential – also regarding the optimal location of possible additional sites.
Customer's objective
The food manufacturer’s primary objectives were to systematically manage and sustainably optimize the complexity of its logistics network, which had arisen from continuous acquisitions and expansions. The focus was on significantly reducing overall transportation and logistics costs—from shipping and trucking to port handling, as well as warehousing and production costs.
Another key objective was the data-driven identification of optimal locations: When expanding into new markets, the goal was to determine the ideal location for new distribution centers (greenfield), while existing locations and networks were continuously reviewed for efficiency (brownfield).
In addition to economic factors, the company sought to create transparency regarding its environmental footprint. By precisely quantifying the CO₂ emissions from its fleet and shipments, the company aimed to lay the foundation for a sustainable, “green supply chain.”
Solution approach
For a planned market expansion into certain regions of Eastern Europe, the distance calculation, extrapolation and location optimization function in PSIglobal was used to determine which location was optimally suited for opening an additional distribution center. The calculation with PSIglobal considered the production sites already existing in Eastern Europe, including small warehouses and a distribution warehouse. A two-stage optimization was carried out, covering inbound logistics and outbound logistics. This way, the food manufacturer pursued the goal of permanently reducing transport costs.
The company has made various calculations in PSIglobal, also to check the efficiency of the distribution network in the UK. The aim was to find out whether the location of the existing distribution warehouse should be retained or whether it would seem reasonable to relocate it to optimize costs. The efficiency of the existing network was confirmed, with the realization that, depending on volume growth, the opening of a second service provider location is recommended.
Another project served to optimize the procurement network for supplying the production sites in Europe. The focus was on the transport costs of the entire supply chain – including ship transports to the ports, port handling, truck transport, and storage and production costs. Using the underlying calculation capabilities in PSIglobal, various. Using the calculation capabilities built into PSIglobal, various combinations of port and warehouse locations were modeled to determine the optimal nodes in the network.
In addition, the food manufacturer uses PSIglobal to calculate CO2 emissions with the goal of creating transparency on the path to a green supply chain. For this purpose, a methodology based was developed for the quantification of CO2 footprint, which considers the shipments made, the vehicle fleet used, and the type of fuel used.
Solution components
- Data import
- Analysis/visualization
- Distance calculation
- Extrapolation/forecast
- Production optimization
- Location optimization
- Tactical tour planning
- Table and graphic export
The result in detail
By implementing PSIglobal, the food manufacturer was able to comprehensively analyze and specifically optimize its existing logistics networks. Specifically, modeling various combinations of ports, warehouses, and transportation modes within the procurement network led to cost and efficiency improvements of over 10% in the areas of transportation, warehousing, and port handling. In addition, the software confirmed the efficiency of existing locations (such as the distribution warehouse in the UK) and identified optimal new locations for market expansion in Eastern Europe. In addition to financial and operational savings, the company achieved complete transparency regarding its environmental footprint through the integrated CO₂ emissions calculation, moving toward a green supply chain.
Conclusion
The case study impressively demonstrates that data-driven supply chain network design is an indispensable tool for companies expanding internationally. Whether restructuring untapped markets (greenfield) or realigning existing networks (brownfield), PSIglobal provides the necessary basis for decision-making to sustainably reduce logistics costs. The case also demonstrates that economic efficiency and environmental sustainability go hand in hand: Companies that precisely optimize their transport routes and locations not only save money but also measurably reduce their CO₂ emissions.
