Minimizing Network Costs

Sample Project

HOW DO WE MINIMIZE TOTAL COST?

The Client
Our client is a mid-sized Canadian retailer with store locations across a wide geography. It has a complex distribution network that has developed over time with growth and changes in the business.

The Need
The client was experiencing operational and capacity issues at two DC locations. Management was concerned that transportation costs were higher than necessary due to the complexity of the distribution network. The client decided to examine distribution on several levels, beginning with an assessment of network design.

The Approach

Our initial assessment revealed that the data available for analysis were incomplete. We:

  • Structured and assessed the available data.
  • Mapped and modeled the current network to validate the data.
  • Defined alternate approaches to distribution.
  • Modeled the total costs of the options.
  • Compared options and worked with our client to select the optimal approach.

The Output
To support decision-making, we produced a summary of:

  • The salient features of the distribution options
  • The total cost implications of the distribution options.

To support the client’s on-going distribution management, we:

  • Summarized key data in structured formats.
  • Provided a large-scale schematic map of the distribution system.

The Impact
Based on the information we provided, our client was able to:

  • Relocate one of its DC’s.
  • Modify its primary DC and eliminate an auxiliary site.
  • Enter into discussions with third-party logistics service providers.

The client will realize savings of several million dollars per year when the solutions are fully implemented.