Consolidating Distribution Networks

Sample Project

WHAT IS THE BEST OPTION?

The Client
Our client is a mid-sized US retailer in the process of integrating four businesses. The stores are located in several regions, with multiple suppliers, DC’s, cross-dock points and complex transportation arrangements.

The Need
Consolidating distribution operations was a logical step for the client, but the complexity and geography of the network made the consolidation decision difficult. Management team members had preconceptions as to the optimal arrangement. The team needed an objective, fact-based analysis of the cost and operating implications of the distribution options in order to reach an objective decision.

The Approach
To develop decision information for the client, SCS had to assemble data from four separate business systems. When this was complete, SCS:

  • Mapped and modeled the current network and used this information to validate the data.
  • Working with the client, defined the distribution options and specified differences.
  • Modeled the cost implications of the distribution options.
  • Compared options and worked with our client to select the optimal approach.

The Output

To assist in decision-making, SCS prepared a summary of the distribution options showing:

  • The key features of each option
  • A comparison of the costs associated with each option.

The Impact
With the information provided by SCS and the learning that took place during the process, our client was able to:

  • Address the preconceptions held by executives.
  • Select the optimal distribution solution.
  • Consider the option of outsourcing some operations.

The client will save at least one million dollars per year in direct and indirect costs when the solution is fully in place.