Case Study: A Roadmap to Improve a Deteriorating 3rd Party Warehousing, Fulfillment and Distribution Relationship

A leading healthcare technology company transitioned its U.S. distribution operations from a previous 3PL provider to a new partner in the middle of the COVID-19 pandemic. The go-live in 2020 was immediately strained by an operational environment misaligned with the client’s product and volume profile. The facility design lacked suitability, automation performance was below expectations, and the new 3PL struggled with staff retention and service delivery.

Following persistent cost overruns and operational disruptions, Miebach, alongside European representatives from the client's parent company, was engaged to conduct a full operational site evaluation. They needed to diagnose inefficiencies, re-establish operational alignment, and support the organization in regaining control of its distribution performance and financials.

• Stabilize distribution operations following a troubled 3PL transition during COVID-19 
• Identify and implement short- and long-term cost-saving initiatives to regain financial control 
• Right-size storage capacity and optimize space utilization to support growing volume demands 
• Improve service levels and automation performance, specifically within AutoStore and reverse logistics 
• Establish a structured PMO governance framework to enable cross-functional collaboration and drive accountability

Miebach structured the engagement into three strategic workstreams governed by our PMO approach & doctrine via a joint SteerCo. Model.

Category 1: Major Pillars

Space Optimization

• Reviewed layout design to reduce capacity stress and improve storage density 
• Set targets: <85% utilization, 0.2% shrink, and 20% improved location efficiency

AutoStore

• Benchmarked performance at 54% vs. target 70%. Identified excessive technician costs with no ROI; Coordinated vendor-side investigation and KPI alignment within Concept of Operations

Outbound

• Assessed outbound workflows and international shipment bottlenecks, Initiated improvements for batch picking and packing list accuracy. Evaluated impact of layout and paperwork processes on field operations

Reverse Logistics

• Applied Kaizen methodology to streamline returns and reduce backlogs. Facilitated scenario analysis, including re-insourcing evaluation. Identified systemic delays and gaps in returns planning and visibility

Category 2: Operations

Master Item Data

• Audited item master for gaps; 27% cube data correction completed and advised against redundant Cubiscan procurement impacting budget. Supported inventory rationalization to increase rack utilization

Concept of Operations

• Aligned BRDs, SOPs, KPIs, and IT system integration into new operational blueprint. Document at 95% completion; final sign-off Q1-2025

Category 3: Relationship

Culture & Trust Building

• Facilitated workshops to restore cross-party communication and visibility 
• Documented 3PL resistance to engagement and transparency gaps

Developed Go/No-Go milestone framework for performance accountability

Miebach’s recommendations with the end-patients & families in mind:

• Implemented cost-focused operational initiatives across all streams, establishing a structured path to achieve $1–2M in annual savings 
• Engaged directly with AutoStore and vendors, initiating root cause analysis and performance management that drove utilization from 54% toward the 70% target 
• Rebuilt the Concept of Operations (COO) to align workflows, KPIs, and responsibilities — reaching 95% readiness for sign-off and deployment 
• Redesigned layout and implemented inventory clean-up actions that improved storage density and increased location utilization by 20% 
• Developed a formalized risk mitigation framework, introducing Go/No-Go milestones to support contract management, escalation, and 3PL accountability 
• Established and executed a phased stabilization roadmap, targeting quick wins and long-term improvements across outbound, automation, and reverse logistics 

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