Case Study: Outsourcing Assessment

Schindler

• Schindler Elevator Corporation is the North American operating entity of the Swiss-based Schindler Group, the world’s second largest elevator company and leading escalator supplier.
• The company operates a single service parts distribution center (DC) located in Chicago, IL that supports all global customers, field service offices and the local plant maintenance group.

Challenge

• Schindler wanted to determine how its internal distribution operational costs would compare to LSP costs and if it should consider outsourcing. The company also wished to rebid its parcel carrier service contract and rates.

Tompkins’ Role

• Performed a feasibility assessment for the service parts operations, which determined the current operations space, efficiency, and costs that justified investigating outsourcing of the entire operation.
• Developed an LSP RFP, pre-qualified a list of candidates, conducted the bid process, and supported negotiation of the contract and transition schedule.
• Developed a parcel carrier RFP, conducted the bid process and supported negotiation of the contract and terms.

The Results

• From the assessment, Tompkins concluded that an outsourced warehouse solution would favorably impact Schindler’s service parts operations costs and service levels. The project team identified inventory tracking and warehouse tactical improvement opportunities to potentially enhance distribution costs through use of better systems and technology at the LSP.
• The parcel bid process identified savings of nearly 15 percent over the existing contract, including service level improvements.