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The Challenge

A client faced declining demand, volatility in commercial sales, and recent technology changes, necessitating a reassessment of their existing distribution model. The goals were to achieve efficiencies, increase capacity, reduce transportation costs, and lower the cost of goods sold (COGS) to improve operating ratios.


What We Did

To address these challenges, we undertook a comprehensive approach:

  • Network Study: Conducted a forensic financial analysis, examined inventory and SKU segmentation and velocity, and analyzed historical demand over the past three years
  • Scenario Analysis: Ran what-if scenarios to project distribution patterns and performed sensitivity analysis to determine the optimal geographic locations for new distribution centers (DCs)
  • Market Research and Cost Baselines: Completed market research and established cost baselines for new DCs
  • Transportation Lane Evaluation: Evaluated suggested vehicle revisions for full truckload (FTL), less-than-truckload (LTL), and intermodal transport based on the new distribution model
  • Cost-Benefit Analysis for Export: Performed a cost-benefit analysis for export into Mexico, focusing on reducing logistics costs


Our Impact

Our efforts led to significant improvements and strategic insights for the client:

  • Comprehensive Business Case: Developed a business case for the executive leadership team, justifying the significant capital expenditure investment and return on investment (ROI) for the proposed network model strategy
  • Implementation Roadmap: Established a project plan with a roadmap for implementation, outlining associated costs and operational change management recommendations for a two-year transition plan
  • Proprietary Tools: Created proprietary tools to enhance data analysis, projecting financial impact and operating costs by market and automating DC operational baselines based on updated volume demands
  • Forecast Preparation: Prepared optimistic, conservative, and pessimistic forecasts with critical analysis to substantiate the distribution design model