Unifying an electronic retailer logistics flow from suppliers to stores

Our client, an electronic consumer goods retailer, planned to reform and unify its logistics flow, from suppliers to stores, which included the layout redefinition of the central warehouse and its processes.

The main goals were to increase flexibility, to reduce delivery times and to improve service level to customers and stores.

This project had a strategic role in designing and validating the to-be scenario.

The methodology can be summed up in process mapping and redefinition, KPI’s setting for scenario validation, preliminary scenario selection, designing of layout and detailed simulation of warehouse operations. In the best scenarios for receiving and shipping windows and for each category of the product were selected based on the impact on transportation, inventory, and in-store operation costs.

Among the changes involved in the proposed solution it can be highlighted a unique logistic flow, workstations and stock areas for each product size, an increase in delivery frequency for almost 50% of suppliers and for almost 30% of stores, a change of flow type for almost 65% of suppliers, a put-to-light sorting for small products, and a picking by store process for medium size products.

The designed solution meets our client’s ambitious service level and lead-time targets, within the current warehouse infrastructure, with the current manpower, with a potential increase in overall efficiency by 11 p.p. and with no need for automated solutions.

What-if analysis, over demand peaks, supplier delays, and lower process productivity, was carried out for a finer validation.

The potential reduction of the proposed solution in our client’s supply chain costs is up to 28%.