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.

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.