Warehouse Network Design – For Retail Supply Chains

In today’s highly competitive retail environment, your warehouse network is more than just a place to store products—it’s a critical lever for enabling speed, reducing costs, and responding to customer demand with agility. Retailers across Australia and New Zealand are feeling the pressure to make their supply chains leaner, more responsive, and future-proof—and at the centre of this transformation is effective warehouse network design.

Whether you’re a supermarket chain managing fresh product replenishment, a department store balancing store and eCommerce stock, or an online pure-play brand scaling rapidly across states, how your network is structured will materially impact service, cost, and capital.

At Trace Consultants, we help retailers take an objective, data-driven and solution-agnostic approach to network design. In this article, we’ll explore what makes a well-designed warehouse network, why it matters, and how to avoid common mistakes that lock in inefficiencies and unnecessary spend.

Why Warehouse Network Design Matters in Retail

The role of your warehouse network is to ensure the right product is in the right place at the right time—at the lowest possible cost.

A well-designed network:

• Optimises inventory levels while maintaining availability
• Reduces transport kilometres and delivery lead times
• Supports omnichannel fulfilment (store, click & collect, and home delivery)
• Reduces duplication of infrastructure, inventory, and effort
• Enhances service levels and customer satisfaction
• Scales with business growth and seasonality without constant redesign

In contrast, a poorly planned network can result in bloated inventory, costly emergency replenishments, missed delivery windows, and fixed costs that outstrip business need.

Common Triggers for Network Redesign in Retail

Organisations don’t undertake a warehouse network redesign lightly—it’s typically driven by major change. Common triggers include:

• Lease expiries: Forcing a decision on whether to renew, relocate, or consolidate
• Growth into new markets: State-by-state expansion or trans-Tasman eCommerce fulfilment
• eCommerce acceleration: Needing faster fulfilment and more agile picking models
• M&A or consolidation: Harmonising supply chains across banners or brands
• High working capital or inventory duplication
• Increased service failures or DIFOT performance issues
• Sustainability goals: Reducing emissions and waste in the logistics network

If these sound familiar, it’s time to take a step back and look at your network through a strategic lens. Trace Consultants can help you assess your current network and model scenarios that align to your future business strategy.

Key Principles for Effective Warehouse Network Design

1. Objectivity is Critical

Network decisions should never be driven by opportunistic property deals or supplier pressure. These short-term “wins” often result in long-term inefficiencies. At Trace, we always begin with an objective diagnostic—free from pre-determined solutions—to define what the business actually needs.

We ask:

• What are the strategic goals of the business (growth, margin, service)?
• What level of inventory is needed to meet demand?
• What service levels are expected across channels and regions?

Our independence means our recommendations are free from bias—we don’t sell properties, lease facilities, or push automation unless it’s justified by the business case.

2. Solution-Agnostic Thinking

Being solution-agnostic means we don’t start with the answer. Instead, we help you explore the right trade-offs between:

• Centralised vs. decentralised networks
• Owned vs. leased vs. 3PL
• Manual vs. automated solutions
• Dedicated eCommerce fulfilment vs. integrated models

Every option comes with cost, complexity, and operational implications. Through scenario modelling, Trace enables you to choose the model that best suits your business—not just today, but in five or ten years’ time.

Explore how we support this approach on our Supply Chain Services page.

3. Inventory-Informed Design

Inventory and network design go hand in hand. Where and how you hold stock has a direct impact on:

• Working capital requirements
• Replenishment speed
• Safety stock levels
• Inter-DC transfers and inventory duplication

At Trace, we combine demand forecasting and inventory analytics to ensure the network is designed around SKU behaviour, not just site location.

We segment inventory by:

• Velocity (fast vs. slow movers)
• Size and handling complexity
• Channel-specific demand patterns
• Shelf-life or perishability

This ensures facilities are designed for real operational needs—not just what fits on a floor plan.

4. Service-Responsive Modelling

Network design is only valuable if it delivers on service. That means being explicit about:

• Store replenishment windows and cut-off times
• Online order delivery SLAs
• Frequency of dispatch to remote or regional locations
• Returns handling and reverse logistics

If your new network design can’t meet your service promise without driving up costs, it’s the wrong design. At Trace Consultants, we integrate fulfilment and logistics planning into every scenario.

5. Scenarios and Sensitivity Analysis

There’s rarely one perfect answer. That’s why robust scenario modelling is at the core of our methodology. Trace runs multiple configurations to explore:

• 2-site vs. 3-site vs. 5-site networks
• Hybrid own/3PL models
• Store vs. customer-fulfilment priorities
• Automation readiness and ROI
• State vs. regional vs. metro-focused strategies

We overlay volume projections, service metrics, labour availability, and transport costs to stress-test the options and build an evidence-based recommendation.

Critical Considerations in Retail Network Design

Beyond the strategic principles, retailers must evaluate several practical and commercial factors when redesigning their networks:

● Capacity and Throughput Planning

You must plan not just for average volumes but peak capacity—think Black Friday, Christmas, or end-of-financial-year promotions.

● Labour Availability and Cost

Warehouse performance hinges on your workforce. Proximity to labour markets, wage expectations, and temp/casual availability can make or break a site’s viability.

● Technology and Systems Readiness

WMS, OMS, TMS and planning tools need to support the network vision. A distributed model without system visibility will result in costly inefficiencies.

● Transport Integration

Warehousing and transport are interdependent. Every network decision must consider inbound linehaul, store deliveries, courier partnerships, and last-mile capabilities.

● Property Market Volatility

Lease duration, make-good clauses, exit flexibility, and capital investment requirements must all be carefully evaluated—especially in a volatile property market.

Trace Consultants’ multidisciplinary approach ensures you consider these dimensions holistically—not in siloes.

Impact on Inventory and Working Capital

A well-designed network doesn’t just cut freight—it frees up capital.

Poor network choices often result in:

• Inventory duplication
• Higher safety stock across nodes
• Inter-warehouse transfers
• Overstocking due to inaccurate replenishment logic

By integrating warehouse network strategy with inventory optimisation, we help retailers unlock working capital and reduce stock obsolescence.

Learn more about our Inventory and Planning support.

Risks of Poor Network Design

Getting this wrong can leave your business locked into multi-year costs and inflexible infrastructure. Common risks include:

• Sites that are underutilised or oversized
• Excess inventory in the wrong places
• Inability to meet service commitments
• Increased emissions and cost-to-serve
• High lease break penalties or stranded capital
• Failure to adapt to market or channel shifts

That’s why network design must be approached as a long-term, strategic decision—guided by data, not gut feel.

How Trace Consultants Can Help

At Trace Consultants, we work with some of Australia and New Zealand’s most recognisable retailers to design, model and implement high-performance warehouse networks.

We bring:

✅ Objective and independent advice – no vested interest in systems, property or suppliers
✅ Deep expertise in retail and omnichannel fulfilment
✅ Robust modelling tools and scenario planning capability
✅ End-to-end visibility from strategy through to implementation
✅ Experience across fresh food, general merchandise, eCommerce, and discount retail
✅ A collaborative style that brings your operations, finance and logistics teams along the journey

Whether you're reassessing your network post-COVID, planning a new distribution centre, or trying to reduce logistics cost-to-serve—Trace can support you through a structured, data-driven and pragmatic approach.

Explore our full range of Supply Chain Strategy and Optimisation services.

The warehouse network is not just the backbone of your supply chain—it’s a strategic asset that influences inventory, cost, service, and customer experience. For retail businesses in Australia and New Zealand, the stakes are higher than ever.

Getting the design right requires objectivity, being solution-agnostic, and a deep understanding of how your supply chain operates—from inbound freight and storage needs to customer service expectations and financial trade-offs.

If your business is considering network expansion, consolidation, or simply wants to sanity-check its current footprint—reach out to Trace Consultants. We’ll help you design a network that’s fit-for-purpose, future-ready, and financially sound.

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The Future of Management Consulting, with AI

A point of view by Shanaka Jayasinghe, Partner at Trace Consultants

Let me get this out of the way upfront: yes, I used AI to help draft this article.

Not because I couldn’t write it. But because, like everyone else, I’m learning how to use these tools effectively—and because it would be disingenuous to talk about the future of management consulting without using the very technology we’re all trying to understand.

AI is already transforming the way organisations think, plan, and operate. For consulting firms—especially those of us who work deeply in supply chain and procurement—this presents both a challenge and an opportunity. We must confront what AI automates, where human expertise still holds unmatched value, and how our role needs to evolve.

At Trace, we see this evolution playing out every day across our projects—from rethinking warehouse and transport networks, the automation of forecasting & purchasing decisions, to the redesigning back-of-house logistics for major hospitals.

The future isn’t about competing with AI. It’s about integrating it—so we can go deeper, act faster, and deliver smarter outcomes for our clients.

A Shift in the Consulting Project Landscape

In a short space of time, we’ve already seen a clear shift in the types of consulting projects clients are engaging. The era of the multi-year tech transformation—requiring armies of consultants, vendors, and SI partners—feels like it’s winding down. Whether driven by economic pressure, AI enablement, or both, organisations are now leaning into more agile, focused initiatives. The brief is clearer: reduce cost, move faster, unlock value.

Clients want surgical improvements to their business model—clear problems, straightforward solutions, pragmatic delivery, and real-time benefit tracking. It’s no longer about grand programs with abstract business cases. It’s about doing fewer things, better.

And in this environment, it’s not the “smartest” consultant who stands out—it’s the most helpful. The real value lies in the application of a solution, not just its design. Those who can implement change, navigate complexity, and deliver impact without overcomplicating it will outperform. That’s the difference between good and great—and it’s what will determine who thrives in the age of AI.

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Consulting’s Core Promise Hasn’t Changed—But How We Deliver It Must

Great consulting has never been just about providing answers. It’s about helping clients solve problems they can’t—or shouldn’t—tackle alone. It’s about building trust, embedding change, and transferring capability.

I read a fantastic piece on consulting back in 2018 that's shaped my perspective since. Robert Hillard wrote in The Mandarin, consulting is at its best when it’s:

• Trusted – grounded in long-term relationships, not transactions
• Transformative – unlocking change that sticks
• Transferable – leaving clients better equipped than before

These principles remain true in the age of AI. But how we deliver against them is changing—fast.

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A Growing Irony in the Consulting Sector

There’s a strange paradox emerging. Many global consulting firms are promoting AI as the key to competitive advantage. Yet in doing so, they’re also accelerating the commoditisation of some of their own services.

As a former Director at Accenture, I’ve seen firsthand how large firms—built for scale and capacity—are grappling with this shift. Their latest global strategy, as reported in the AFR, reflects a sharp pivot towards AI-powered service lines. But in doing so, many are caught in a tension between automating delivery and preserving value.

If AI can automate benchmarking, generate strategy slides, simulate business cases, and process supply chain data in minutes—then why engage a traditional consultant?

The answer, of course, is: it depends on what you want.

If you want a generic solution based on global best practice and internal toolkits, AI might be enough. But if you want something fit-for-purpose, grounded in the operational realities of your business, and actually implementable—then you still need people who understand how supply chains work on the ground, how technology integrates across the stack, and how to drive alignment across stakeholders.

That’s where the difference lies. And it’s where Trace has always focused our value.

The Spotlight on Big Consulting—and the Rise of Boutique Specialists

The broader context cannot be ignored. The PwC Australia tax scandal has prompted a wave of scrutiny around consulting engagements—especially within government.

Large firms, once the default, are now under more pressure than ever to justify cost, independence, and delivery value. In this environment, boutique firms like us have found greater traction—not just because we’re smaller, but because we’re specialists.

We bring deep, operational expertise in supply chain and procurement—not just strategy, but execution. We know how to redesign supply chain technology architectures and work with operators to optimise for outcomes - whether that be oriented towards driving service, growth or cost outcomes. We know what warehouse constraints actually look like on site. We know how to navigate and implement change in complex government and commercial environments.

What’s Becoming Less Valuable in Consulting

AI has already made some aspects of our profession redundant—and more change is coming.

Tasks like deck-building, benchmarking, financial modelling, and process mapping are being automated. These used to be core deliverables; now they’re inputs, or even by-products, of the real work.

Some forms of IT consulting, particularly those relying on offshoring or capacity-based delivery models, are at risk. Why engage a team to build a data model over three weeks when an AI tool can structure 80% of it in a day?

Clients expect—and deserve—faster, more efficient delivery.

Let’s call it out clearly:

1. Generic Benchmarking and Presentation Building

Once a differentiator, now a commodity. If you’re producing decks that repackage existing content, clients will quickly realise they can generate it themselves—with better data and in less time.

2. Surface-Level Expertise

Summarising industry trends or deploying generic maturity models without tailoring to the client’s operating model, commercial context, or tech stack is no longer good enough. Clients want specific, actionable insights.

3. Chargeable-Hour Based Operating Models

Charging for time rather than outcomes is under threat. When a task is automatable, the expectation will shift toward fixed-price, outcome-based delivery—especially in areas like procurement diagnostics, network design modelling, or demand planning.

Consultants need to go beyond what AI can do. That’s the new bar.

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What’s Becoming More Valuable in Consulting

As AI takes over commoditised tasks, the real value in consulting shifts to the things it can’t do—yet.

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1. Deep Domain and Operational Expertise

Nowhere is this more true than in supply chain and procurement.

From configuring a WMS system for complex warehouse flows to evaluating supplier transition risk across a hospital network, the nuance required can’t be faked.

Our clients choose us because we understand their operations at a granular level. We know what happens at the loading dock. We understand how a supplier shift affects patient flow, shift rostering, or site safety.

That’s not something AI can infer from a spreadsheet.

2. Human Connection and Change Enablement

AI doesn’t build trust. It doesn’t resolve tension in a boardroom or help a CFO navigate uncertainty in a capital project.

Consulting is still about people. That’s more true than ever in a world where technology creates answers, but humans make decisions.

3. Strategic Intuition and Decision Framing

AI can present options—but it can’t navigate trade-offs in a complex business environment.

Whether we’re advising on S&OP frameworks, indirect procurement strategies, or warehouse footprints, our clients value judgement—the kind that comes from doing it before, in multiple contexts, and knowing where to flex.

The Architecture Challenge: Data Disintegration in Supply Chains

If there’s one thing holding organisations back from AI-enabled transformation—it’s their fragmented system landscape.

In supply chain, we see this daily:

• ERP for finance and materials
• APS for planning
• WMS and TMS for logistics
• P2P for procurement
• BI tools for reporting
• All alongside countless excel spreadsheets!!!

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Each holds different data, structures, and timestamps—creating blind spots and inefficiencies.

This leads to:

• Limited visibility of landed costs or working capital
• Duplicate supplier records
• Misaligned planning and execution
• Excel-heavy workarounds

AI won’t solve this alone. But it can help:

• Integration layers to harmonise data
• Agents to fill data gaps with external benchmarks
• Decision engines to simulate outcomes across constraints

But only if consultants know how to apply it operationally.

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Bridging the Gap: From Data Fragmentation to AI Enablement

AI’s power is only as strong as the data it can access. In supply chain and procurement, fragmented systems often limit that potential. Legacy platforms, siloed functions, and poor integration can stall even the best AI tools. Effective consultants help cut through this. Drawing on deep operational experience, they guide businesses to prioritise tech investments with a practical lens—introducing targeted solutions that capture and connect the right data without overengineering. This approach maximises the impact of AI while keeping integration costs lean.

At Trace, we’ve helped clients unlock critical data and enable AI-driven planning, forecasting, and workflow automation. If you're navigating this space, reach out to Tim Fagan or Mat Tolley—they’re doing this work right now and can help you move faster, smarter.

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A New Model of Consulting: AI-Augmented, Human-Led

At Trace, we believe the future isn’t AI versus people—it’s AI plus people, each playing to their strengths.

Our model is simple:

• AI does the heavy lifting – data ingestion, pattern recognition, workflow automation
• Our consultants lead the thinking – alignment, change, solution design, implementation

Whether optimising a warehouse network, designing linen logistics for a new hospital, or deploying scheduling tools for aged care—our team uses AI to go faster but always lead with human judgement.

What This Means for Talent

The consultant of the future isn’t just a generalist. They’re:

• A systems thinker
• An operations expert
• A change leader
• A technologist (even if not a coder)
• A trusted advisor

At Trace, our team includes planners, engineers, operators, integrators—and the occasional AI enthusiast.

These are the people who will thrive in the future of consulting.

The More Things Change, the More We Need to Stay Human

AI will replace parts of consulting. But it will also elevate it.

Our job is not to resist the shift—but to lean into it with clarity, ethics, and courage.

To stop charging for what’s easy.
To focus on what’s hard.
To go deeper.
To be faster.
To stay human.

At Trace, that’s been our model since day one: operational depth, client intimacy, real-world results.

Yes, I used AI to help write this.

But it’s the human insight that makes it matter.

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Trace Consultants - Your Supply Chain and Procurement Partner

Navigating the Complexities of Supply Chain and Procurement

In today’s fast-paced and ever-evolving business landscape, supply chain and procurement management have become critical drivers of success for businesses across Australia and New Zealand. From ensuring seamless operations to meeting customer expectations, companies face mounting pressure to optimise their processes while keeping costs in check. Whether you’re a small business in Sydney or a large enterprise in Auckland, the challenges of managing a supply chain—coupled with the intricacies of procurement—can be overwhelming.

That’s where Trace Consultants comes in. As a trusted partner for businesses in the ANZ region, we specialise in delivering tailored solutions that streamline operations, enhance efficiency, and drive measurable results. In this article, we’ll explore how Trace Consultants can help you overcome supply chain and procurement challenges, offering practical strategies to transform your business for the better.

The Importance of Supply Chain and Procurement in Australia and New Zealand

The ANZ region presents unique challenges for supply chain and procurement professionals. With vast geographical distances, reliance on imports, and the need to comply with strict regulatory standards, businesses in Australia and New Zealand must navigate a complex web of operational hurdles. Add to that the increasing demand for sustainability, the rise of e-commerce, and the need for real-time visibility, and it’s clear why robust supply chain and procurement strategies are more important than ever.

A well-optimised supply chain ensures that goods move efficiently from suppliers to customers, minimising delays and reducing costs. Meanwhile, effective procurement processes enable businesses to source high-quality materials and services at competitive prices, fostering strong supplier relationships and ensuring long-term sustainability. At Trace Consultants, we understand the unique needs of ANZ businesses and are here to help you achieve operational excellence.

How Trace Consultants Can Help: Example Solutions

At Trace Consultants, we pride ourselves on offering a holistic suite of services designed to address every aspect of your supply chain and procurement needs. Here’s how we can help your business thrive:

1. Supply Chain Strategy: Streamlining Operations for Success

A well-designed supply chain strategy is the backbone of any successful business. At Trace Consultants, we work closely with you to develop a tailored strategy that optimises efficiency, reduces costs, and enhances customer satisfaction. Whether you’re looking to improve inventory management, reduce lead times, or enhance visibility across your supply chain, our team of experts has the knowledge and experience to deliver results.

We focus on creating streamlined operations that align with your business goals, ensuring that every step of your supply chain—from sourcing to delivery—operates seamlessly. By leveraging data-driven insights and industry best practices, we help you identify inefficiencies, mitigate risks, and build a supply chain that’s resilient and adaptable to change.

2. Procurement Solutions: Navigating the Complexities with Ease

Procurement is more than just purchasing goods and services—it’s about making strategic decisions that drive value for your business. At Trace Consultants, we help you navigate the complexities of procurement by working closely with you to address the intricacies of location, design, and execution. Our team provides end-to-end support, from supplier selection to contract negotiation, ensuring that you get the best value for your investment.

We also help you implement sustainable procurement practices, ensuring that your sourcing decisions align with environmental and ethical standards—a growing priority for businesses in Australia and New Zealand. With our expertise, you can build a procurement strategy that’s efficient, cost-effective, and future-proof.

3. Business Transformation: Driving Growth Through Innovation

Business transformation is about more than just incremental improvements—it’s about reimagining the way your business operates to achieve sustainable growth. At Trace Consultants, we deliver a comprehensive suite of business transformation services, including vision and strategy development, process optimisation, and seamless implementation.

Whether you’re looking to modernise your operations, expand into new markets, or improve customer experiences, our team is here to guide you every step of the way. We take a holistic approach, ensuring that every aspect of your business—from supply chain to procurement to customer engagement—is aligned with your long-term goals.

4. Intralogistics Solutions: Enhancing Operational Efficiency

Intralogistics—the management of internal logistics processes—is a critical component of any supply chain. At Trace Consultants, we deliver practical intralogistics solutions that elevate operational efficiency, flexibility, and excellence for your business. Whether you need a manual, semi-automated, or fully automated distribution centre (DC) design, we tailor our solutions to meet your specific needs.

Our team works with you to optimise warehouse layouts, improve material handling processes, and implement automation where appropriate. By enhancing the flow of goods within your facilities, we help you reduce costs, improve throughput, and ensure that your operations run smoothly.

5. Network Solutions: Unlocking Your Business’s Potential

Your supply chain network is the foundation of your operations, and optimising it can unlock significant potential for your business. At Trace Consultants, we offer comprehensive network solutions and inventory strategies that empower seamless connectivity across your total supply chain. From designing distribution networks to optimising inventory levels, we help you create a network that’s efficient, scalable, and responsive to market demands.

We also provide tools and strategies to improve visibility and collaboration across your supply chain, ensuring that you can make informed decisions in real time. With our network solutions, you can reduce bottlenecks, improve delivery times, and enhance overall performance.

6. Digital and Omni-Channel Solutions: Staying Ahead of the Competition

In the digital age, businesses must adapt to changing customer expectations and embrace omni-channel strategies to stay competitive. At Trace Consultants, we help you stay ahead of the competition with transformative digital and omni-channel solutions. From implementing e-commerce platforms to integrating online and offline channels, we deliver seamless customer experiences across all touchpoints.

Our team also helps you leverage digital tools such as data analytics, AI, and automation to gain insights, improve decision-making, and enhance operational efficiency. By embracing digital transformation, you can meet the demands of today’s tech-savvy consumers while positioning your business for long-term success.

7. Technology Services: Empowering Your Business with Innovation

Technology is a game-changer for supply chain and procurement management, and at Trace Consultants, we help you harness its power to drive operational efficiency. Our diverse technology services range from IT transformations to ERP (Enterprise Resource Planning) and WMS (Warehouse Management System) implementations, ensuring that your business is equipped with the tools it needs to succeed.

We work with you to select, implement, and optimise technology solutions that align with your business goals, whether you’re looking to improve inventory tracking, automate workflows, or enhance supply chain visibility. With our expertise, you can unlock the full potential of technology to transform your operations.

8. Project Services: Delivering Results with Precision

Executing complex supply chain and procurement projects requires careful planning, coordination, and execution. At Trace Consultants, our dedicated project execution team brings invaluable real-world insights to every project, ensuring successful delivery from start to finish. Whether you’re launching a new distribution centre, implementing a technology solution, or restructuring your supply chain, we’re here to help.

We take a collaborative approach, working closely with your team to ensure that every project is completed on time, within budget, and to the highest standards. With our project services, you can achieve your goals with confidence, knowing that you have a trusted partner by your side.

Why Choose Trace Consultants?

At Trace Consultants, we’re more than just a service provider—we’re your partner in success. Here’s why businesses across Australia and New Zealand choose us:

• Tailored Solutions: We understand that every business is unique, which is why we offer customised solutions that align with your specific needs and goals.
• Proven Expertise: With years of experience in supply chain and procurement, our team has the knowledge and skills to deliver results.
• Focus on Sustainability: We help you implement sustainable practices that benefit your business and the environment.
• End-to-End Support: From strategy development to execution, we provide comprehensive support at every stage of your journey.
• Commitment to Excellence: We’re dedicated to delivering measurable outcomes that drive long-term success for your business.

Partner with Trace Consultants for a Brighter Supply Chain Future

Supply chain and procurement management can be complex, but with the right partner, you can turn challenges into opportunities. At Trace Consultants, we’re committed to helping businesses in Australia and New Zealand achieve operational excellence, reduce costs, and enhance customer satisfaction. Whether you’re looking to optimise your supply chain, streamline procurement, or embrace digital transformation, our team has the expertise and solutions to make it happen.

Ready to take your supply chain and procurement processes to the next level? Contact Trace Consultants today to learn more about how we can help your business thrive.

Visit Trace Consultants to get started on optimising your supply chain and procurement processes today!

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