Footwear retailer optimizes product flow and expands for growth
An American footwear retailer needed to optimize their supply chain and develop an expansion strategy for meeting future demand. 3TO was able to help build a network design model and identify key areas for savings and optimization.
The footwear retailer is a major store chain operating over 500 locations in the United States, including an e-commerce website. The retailer serves demand across footwear and apparel, split by multiple designer and name brands.
The company was faced with increased e-commerce demand. The challenge was to determine whether to expand the fulfillment center delivery capacity or serve more e-commerce volume from retail stores. The company also wanted to optimize warehouse use feeding the stores across the country.
Solution & Results
We built & exercised a network design model to optimize the current network, as well as determine the best approach for expansion to meet future demand growth. There were opportunities to optimize product flow within the existing network.
We identified over 5.5% savings in the network, through a combination of fulfilment center expansion & product flow optimization. To model the decision between serving e-commerce demand from stores or fulfillment center, we utilized virtual node modelling to represent the store footprint.