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Reduction transportation & warehousing costs

April 06, 2016 7381 Views


Philip Morris Polska S.A. is the leading tobacco company in Poland with a domestic market share of about 36%. Philip Morris tobacco brands in Poland include Marlboro, Chesterfield, L&M, Carmen, Caro, Klubowe, Fajrant, Zefir, and Virginia.

Philip Morris Polska S.A currently runs a factory warehouse in Krakow and 11 Distribution Centers throughout Poland. Philip Morris questioned whether restructuring the distribution network results in cost savings. Furthermore there was a need to benchmark the logistics costs to identify outsourcing opportunities.

Using supply chain modeling software, Groenewout reviewed the current distribution network on its logistics costs and its customer service level. By analyzing several concepts the optimal distribution concept (in number and location of warehouses) was determined. In addition, Groenewout supported Philip Morris on logistics outsourcing strategy and benchmarked the logistics costs. An implementation plan was presented for partner selection, contracting and migration.

Philip Morris gained significant cost reduction in logistics and an optimal distribution network which meets the customer requirements Possible logistics partners were identified to support PMPL in the optimal distribution concept and an implementation plan was set up.