Started by its founder in his basement in 1985, Horizon Hobby has grown over the years to become a leading international developer, marketer and distributor of radio-controlled hobby products. The company brings to market model aircraft (airplanes and helicopters), ground vehicles (cars and trucks), boats and trains, as well as radio transmitters, receivers and other accessories.

Horizon Hobby was operating two U.S. distribution facilities, one in the Midwest and one on the West Coast. The company was serving customers in both the business-to-business channel and its more rapidly growing business-to-consumer segment.

Horizon Hobby was experiencing substantial sales growth, driven by even higher demand during the pandemic, and business was expected to double again in three years. Additionally, the swift evolution of e-commerce has changed customer expectations and shifted material handling needs within the distribution facilities. Horizon’s changing sales and operational profile, along with solid growth projections, required an increased focus on the need to develop a long-term supply chain network strategy to cope with capacity and fulfillment pressures on the two existing U.S. distribution facilities.

To position itself for future demand, Horizon Hobby sought an experienced consulting partner to objectively explore the cost and service implications of alternative distribution operating models. The company was looking to increase the efficiency of its supply chain without sacrificing customer service.

In addition to better understanding how its current network was positioned for growth, Horizon Hobby was looking to assess multiple network alternatives with respect to the location, size and type of each facility, including implementation of a hub-and-spoke operating model. Other considerations included alternative port options resulting from changes in manufacturing sources, the potential for transloading and less-than-containerload consolidation, requirements for the handling of product returns, and risk mitigation.

Horizon Hobby turned for help to Jones Lang Lasalle Inc., which undertook a network analysis of the company’s supply chain in three areas: 

• Data collection and baseline development. JLL provided Horizon Hobby with a structured data request outlining the information needed for the project. The project team conferred with various functional experts across the company (including sales and marketing, transportation, distribution operations and finance) to gain a more comprehensive understanding of the client’s business objectives.
• Operating model and scenario analysis. JLL drew on sophisticated modeling tools to analyze various “what-if” scenarios, and measure their cost and service performance relative to the current baseline. The effort was accomplished through frequent communications with Horizon Hobby’s supply chain leadership, with which JLL shared the progress of the initiative and sought alignment on direction.
• Recommendations and high-level implementation planning. At the conclusion of the project, JLL reviewed the results and made recommendations to Horizon Hobby in a series of executive-level working sessions to facilitate understanding of the various operating scenarios, as well as craft a plan for implementation.

JLL was asked to perform a network-strategy study that utilized supply chain optimization modeling techniques and other analytics to evaluate the cost and service implications of multiple operating scenarios. In the end, the work provided Horizon Hobby with a fact-based supply chain strategy and vision to guide its growth for the future.

Based on the results of the supply chain consulting analysis and past experience in working with JLL, Horizon Hobby is now evaluating real estate-related advisory and brokerage services to support implementation of the future-state plan.

“From our initial meeting with JLL, it was clear they wanted to understand our business and operational objectives in detail,” says Michael Ritter, senior vice president of supply chain management with Horizon Hobby.

“They engaged with whiteboard working sessions in a collaborative approach with our leadership team, and demonstrated their expertise in the process.

“JLL’s hands-on approach resulted in clear recommendations on how to optimize our current and future distribution footprint,” Ritter continues. “All project objectives were met, and we were very pleased with the methods of execution and results delivered by the JLL team.”

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