Event panning
Process?
Techniques?
Tools?
Measures?


Home delivery

Design?
Cost modelling?


Returns policy, processes and management
    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.

 
   
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.