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Event
panning
Process?
Techniques?
Tools?
Measures?
Home
delivery
Design?
Cost
modelling?
Returns
policy,
processes
and
management |
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Distribution
network strategy
for general merchandise retailer
A UK distribution network design - at a basic
level this covered; which distribution centres to open (where and
how big), which to close, where sites could be consolidated and what
the functionality/range would be for each facility.
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This
pragmatic strategy took into account real quotes for potential new
sites and all decisions were based on detailed financials covering;
P&L, cashflow and NPV impact of various options.
The strategy included:
• Location modelling of existing and new facilities.
• Integration of separately run distribution networks.
•Determination of lowest cost stockholding location for each
sku (stock keeping unit) - i.e. which sku's to hold centrally and
which in regional distribution centres (DCs). The model covered all
costs associated with holding stock in different locations; activity
costs based on product cube throughput, transport costs, stockholding
costs, space costs and the cost change from suppliers delivering to
a single central or multiple regional points.
• Pick slot type optimisation by sku – as well as total
activity cost optimisation this took into account the overall context
of existing DC capacity, range requirements and total number of facilities
required.
• Quantifying the cost impact from other areas of the business
on the supply chain; cube of product selections, returns management
and stockholding, size of inventory reduction programme and growth
in direct importation. |