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Supply chain configuration with significant savings
Optimization of the supply chain structure at PM International
PM International was faced with the challenge of making a rapidly growing supply chain network more efficient. Together with valantic, a new target structure was developed that optimized transport and storage costs and eliminated capacity bottlenecks.
About the company
PM International is a manufacturer of nutritional supplements and cosmetics with a turnover of over 300 million euros in Europe. Together with valantic, the company optimized its supply chain structure. The focus was on developing a new network concept for Europe and Asia and defining a sustainable supply chain strategy. Potential savings in the double-digit million euro range were identified.
The project
The challenge
PM International operates in more than 40 countries and manages 35 subsidiaries. The strong growth of recent years has led to significant capacity bottlenecks in warehouse structures and very high transportation costs, which have reduced the profitability and efficiency of the supply chain.
Consulting approach
1. Analysis of the current situation:
- Evaluation of the current transportation and warehouse structures
- Definition of medium-term supply chain capacity forecasts
2. Development of optimization scenarios:
- Derivation of a business case with four different scenarios
- Evaluation based on OPEX, CAPEX, capacities and other qualitative criteria
3. Location and network optimization:
- Definition of the optimal HUB location using the Center of Gravity (CoG) analysis
- Evaluation of further location characteristics for strategic decision-making
- Evaluation of operating options (own operation vs. external operation)
Solution and customer benefits
By systematically analyzing the current situation and developing a strategic target picture, PM International was able to define a future-oriented supply chain strategy for 2025. An initial business case assessment identified considerable savings potential and served as the basis for deriving the target structure.
Conclusion
The redesign of the supply chain enabled PM International to realize annual savings in the double-digit million range. This was driven by targeted network optimization, comprehensive location analyses, and a robust economic evaluation of alternative scenarios — a significant step toward a more efficient and resilient supply chain.
Your Contact
Dr. Bernhard Höveler
Partner & Managing Director
valantic Supply Chain & Procurement Consulting