World’s 5th Fastest-Growing Retailer Strategic Network Design supporting fast expansion

RETAIL

2K+ Active SKUs

12K+ Stores

300+ Vendors

$4.5B Revenue

56 DCs

Goals

Transform store location selection process into data-driven decision-making

Minimize logistics costs by establishing optimal network design for DC-store mapping

Identify the most cost-effective network structure that supports aggressive growth

Create and maintain a digital modeling platform that can be used with minimum effort to run what-if scenarios on new DC locations and territory assignment decisions

Challenges

Constantly growing vast network of stores, vendors, and alternative DC locations

Operational challenges like workload balancing across DCs, geographical boundaries, and service requirements

Manual process of determining new warehouse locations while opening 1000+ stores per year

Need for what-if analysis with many scenarios calculating Total Cost to Serve for different planning parameters

Limited resources in the central planning team

Benefits

Improved planner productivity and quality of decision-making based on advanced analytics

Reduced Total Cost to Serve by 4.7% with optimal DC locations and territory assignments

Reduced average trip distance per shipment from DCs to stores by 42.1%

15+ – Network design instances across 8 years

+ – Scenarios evaluated at each instance

Solutions

“Solvoyo’s Network Design solution allowed us to minimize total transportation costs in our network and optimize distribution centers and store locations. We can compare 15 to 20 scenarios every year where the solution recommends DC-store mappings to reduce total-cost-to-serve. In addition to this, we can now evaluate the potential new stores based on expected store demand and easily view them on a location-based map. All of these are available within the same solution.”

Gurhan Ozesenli, Project Manager