Southgate

Southgate’s recent geographic and strategic shifts have introduced new challenges alongside existing ones. At the same time, rising lead times, supplier costs, transport costs and manufacturing costs have created a far more challenging planning environment.

Supporting Southgate through its various challenges is Slimstock, and its supply chain planning platform, Slim4.

Challenges

Like many supply chains, Southgate’s is dealing with a period of significant disruption. Trade route closures are impacting lead times, while oil price hikes impact the cost of transit, sourcing and manufacturing. Meanwhile, the business has gone through a considerable shift over the last two years, from approximately 80% consumables to 80% equipment and bespoke solutions.

The expansion into the US complicates things further, with new sourcing networks, tariffs and other complications to address.

“In the last two years, our business has shifted from 80% consumables and packaging to 80% equipment and bespoke solutions,” said Catalina. “At the same time, rising costs, supply chain disruption and the need to quickly establish new sourcing routes have created a much more complex planning environment.”

To thrive under such conditions, Southgate needed to improve inventory control, maintain service levels and create the agility to respond quickly to market volatility.

Results

Since implementing Slim4, the Southgate team have embraced the platform to achieve impressive results across inventory, availability and operational efficiency.

Highlights

• £12M reduction in inventory value, from £20M to £8M
• Excess stock reduced from £8M to less than £3M
• A-line availability increased by 12.5%
• 30% reduction in 3PL labour requirements

Bill of Materials module

Recently, Southgate expanded their use of Slim4, tapping into the Bill of Materials module (BOM) to support their need to efficiently plan for growing equipment sales. Items within scope of the BOM module experienced:

• Improved availability from 91% to 98%
• Excess stock reduced from £360k to £155k

“The investment into the Bill of Materials module was a no-brainer. We had noticed we were selling more equipment and it was quite clunky to plan for the components outside of Slim4.”

Staff and resource planning

Through forecasting improvements and better planning, Southgate has also experienced benefits in resource and workforce allocation. With better insight into demand, the business has been able to consolidate orders and cut 3PL resource requirements by 30% as a result.

Speaking to the gains in operational efficiency, Catalina shared: “The warehouse team used to be flooded with stock from all over. But now, Slim4 makes it easy to provide projections of inbounds and stock levels, meaning we can order full containers most of the time and know what to expect.”

Dealing with disruption

Like many businesses, Southgate is having to deal with significant disruption. Disrupted sourcing routes have extended lead times and driven up the price of oil. In turn, costs associated with transit and manufacturing have also ballooned.

However, despite the scale of disruption, Southgate was able to respond quickly and maintain strong availability in key product ranges.

“You need the right planning solution to allow you to respond to such chaos and crises with more agility, and more confidence,” said Catalina.

With much of the industry dealing with longer lead times and lower availability, Southgate were able to capitalise on the supply shortage, with Catalina revealing: “On some products where we had good availability, we’ve actually seen an increase in demand.”

Finding additional margin

At Southgate, Slimstock has played a key role in protecting and improving margin. As well as helping Southgate capitalise on supply shortages, Slim4’s ABC classification capabilities helped identify products where purchasing larger quantities was less of a risk. This allowed the business to purchase at a lower cost per unit, without risking additional excess and waste, with Catalina sharing that Slim4 makes it “easier to identify when we can order more and get that better price.”

Strengthening the relationship with finance

Catalina also found that her department’s relationship with the Finance team also improved. By improving working capital performance and visibility, the Finance team gained greater confidence in the supply chain team’s decisions.

Catalina said: “The fact that we reduced our working capital tied up in stock was helpful for the Finance department. But I think the main thing for me was the fact that we regained their trust.”

Next steps

Not content with the improvements made to date, Southgate has its sights set on what’s next. Further improvements to margin remain a key objective, with plans to reduce excess stock further while supporting long-term growth ambitions.

Alongside this, the business is also exploring the potential of AI in the supply chain, and how it can enable teams to focus on higher-value work.

“The key thing for me is adopting AI as much as possible and reducing all the admin and manual tasks as much as possible,” shared Catalina.

Alongside the exploration of, and investment into technological solutions, Southgate isn’t losing sight of the people behind the supply chain.

“The offer of free education, the academy events, the user day, etc. is something I value from our relationship as well,” shared Catalina