Mid-Market Commerical Supplies Firm Consolidates Distribution Network

WarehouseQuote was approached by a Mid-market commercial supplies firm, a nationwide distributor serving the janitorial, food service, automotive, and dental industries. Prior to working with WarehouseQuote, the company was distributing products from over (20) individual 3PL providers and shipping origins across the United States. The client approached WarehouseQuote to help reconfigure their distribution network to improve visibility and simplify inventory management with a goal to reduce average miles per shipment and transportation costs.

The Challenge

• Limited inventory and order visibility across 20 distribution locations
• Elevated average miles per shipment, over 700 miles per outbound, creating fulfillment inefficiencies
• Annual transportation costs surged over $3+ million due to segment network

Analysis

The WarehouseQuote data team analyzed the client's outbound order distribution data to determine where orders were shipping to, identifying shifts in consumer buying behavior. Based on the analysis, WarehouseQuote determined that a majority of outbound shipments were fulfilled from 3 of their 20 existing distribution nodes: SC, CA, and TX. Leveraging proprietary technology, the WarehouseQuote team was able to identify the optimal location to position inventory to reduce average miles per shipment.

Implementation

Leveraging a Warehouse Location Optimization (WLO) study, WarehouseQuote developed a detailed implementation roadmap including sourcing net-new facility partners and coordinating inventory transfers from existing facilities. Integrations for fulfillment on the West Coast, East Coast and Midwest were stood up in less than a month. The team continued monitoring of ideal cargo location, placing inventory strategically to reduce transportation spend. With WarehouseQuote, the commercial supplies wholesaler also receives a project management team for inventory and order management support, retail chargeback and exception identification, and inventory visibility across their facility locations.

Results

• 33 percent reduction in annual transportation miles traveled, from ~700 miles traveled per outbound to 550 miles
• Over $1+ million dollars in annual transportation cost savings
• Significant annual reduction in retail chargebacks
• Single point of contact for all 3PL distribution locations with customized SOPs

Future State

After Year 1, WarehouseQuote ran a similar analysis for the firm a year after implementation to validate the changes to their distribution network. The analysis confirmed the existing (3) locations as optimal locations of inventory placement plus recommended an additional node in Houston, Texas to drive further cost and network efficiencies.