Retailer Expects Savings of $50 Million From Distribution Center Consolidation
Client Challenge
The client is North America’s largest small-box discount variety retailer, operating multiple banners and channels. Historically, the retailer’s different banners operated independent supply chain outbound transportation networks. However, the company wished to merge its logistics operations into a consolidated distribution center (DC) model to realize significant cost savings. The banners used several different technology systems for merchandising, warehousing, and transportation. These systems required new integration to send appropriate data between banners. Additionally, the retailer desired to test shared-spaced options at a pilot DC as well as throughout the merged transportation network.
Parker Avery Solution
To achieve the retailer’s desired distribution center consolidation model, The Parker Avery Group worked with key stakeholders in the following activities:
- Met with all business units to determine business requirements needed for the pilot DC as well as future requirements to ensure the system design worked in other distribution center consolidations
- Developed integration design documentation and business use cases to address all gaps identified between the multiple banners’ systems
- Developed current and future business process documentation to ensure efficient shipping
- Detailed a roadmap that outlined the business priorities and estimated timelines to implement the solution in any DC in the retailer’s network
The project produced the following key deliverables:
- Pilot and future-state business requirements
- Integration design
- Business process design
- Roadmap to support full rollout of the distribution center consolidation
Results
As a result of the distribution center consolidation project, the retailer expects to begin the pilot of the outbound multi-banner shipments within the year. The client also expects to implement the full solution in other DCs within two years.
Upon completion of the enterprise-wide distribution center consolidation implementation, the retailer anticipates transportation cost savings of over $50 million annually.
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