Seven Steps to Optimize Your Supply Chain Network That Can Reduce Transportation Costs by 20-30%
Have you experienced a material change in your store count, brick & mortar versus online mix, geography, and/or sales volume in the last 24 months? If you have, there’s a compelling reason to thoroughly analyze your supply chain network transportation costs.
SD Retail clients have realized 20-30% savings on distribution costs, reduced their capital requirements and improved Supply Chain performance, service levels to the stores, and overall customer experience through Supply Chain Network Optimization.
The combination of strategy, data, an experienced team, and network optimization software with advanced analytics enables retailers to proactively plan facility locations and DC sizing. The material, sustainable benefits include:
§ 20% - 30% (or more) reduction in transportation costs
§ Better in-stock position – reduced lead time and more effective planning and allocation
§ Shorter transit times to stores and/or customers
§ Lower capital requirements – creating a foundation for space and facility planning as well as operational process improvements
Keys to Success
There are typically seven key steps to developing the most accurate model to map the future of your supply chain network organization:
Step1: Assemble the Right Project Team
Network optimization success requires both a senior level core working team that researches and defines the right choices and an engaged executive steering team that challenges choices and ensures they meet current and future business needs.
Step 2: Data Accumulation and Input
Gather accurate data that matches the specific needs of the business at the appropriate level of detail for transportation, workforce management, and facilities. Data accuracy through proper cleansing and validation is critical.
Step 3: Define Strategy & Initiatives and Develop Projections
Ensure that all appropriate strategies and potential changes are considered through a complete due diligence program including leadership and stakeholder interviews.
Step 4: Run Models
Using the information gathered, utilize capable software tool(s) to establish the baseline model, as well as run optimization and “what-if” scenario models.
Step 5: Define the Impact of Potential Scenarios
Determine the quantitative and qualitative impact and benefits of each potential scenario across each business channel and functional department. Be sure to include consideration of any relevant strategic or operational initiatives.
Step 6: Make the Decision
Review the results with key stakeholders to validate findings. Identify the recommended option or options within the core team and present to the executive steering team for final decision.
Step 7: Plot the Course
Plot the course by aligning cost savings identified by the model with capacity requirements, capital requirements and an appropriate schedule of implementation of changes to facilities and routing
There are multiple data sources and functionally-integrated stakeholder departments that must be coordinated for effective Supply Chain Network Optimization. Data accuracy is imperative for valid modeling results. However, if the appropriate process is applied, the right project team engaged, and options are fully vetted and validated, a Supply Chain Network Optimization effort will typically produce enhanced network service levels, improved customer experience, and 20-30% in savings.
If you would like to see a more information on SD Retail and the services provided for optimizing your infrastructure please click here SD Retail - Home Page or visit our website www.sdretail.com
SD Retail Consulting would be happy to answer any questions regarding network optimization and broader supply chain efficiency opportunities. Please contact our team members listed below:
About SD Retail Consulting
For nearly 40 years, SD Retail Consulting has maintained a recognized position as a leading global provider of process improvement and business consulting to retailers and consumer businesses. Primary disciplines include store operations, workforce management, merchandising, supply chain, strategic growth initiatives, customer experience, headquarters effectiveness, and shrink & margin recovery. SD Retail has a proven track record of developing customized solutions and implementing those solutions while managing change and delivering measurable and sustainable results. SD Retail is member of the Hilco Organization and maintains primary office locations in
Company Expands Merchandising and Strategy Practice With Seasoned Retail Executive
Farla Efros, Former Office Depot Senior Executive Joins as EVP and Chief Operating Officer
Comprehensive Service Offering Will Build on Vast Network of Retail Relationships, Access to Capital Investment and Real Estate Resources, and Expertise in Redefining the Store Experience