Building Capacity with Flexibility for Future Growth: A sporting goods retailer with a large and growing bricks and mortar presence and a rapidly expanding online direct-to-consumer channel wanted to enable continued growth of both channels, without straining capacity of their existing network. With a wide assortment of products online, they were uncertain whether the new online channel would be better served by a separate DC or by integrating with one of their two existing facilities. Projected store growth was expected to further strain capacity of their existing DCs. Fortna analyzed the business requirements, growth projections and historical data to determine when additional capacity would be needed and the optimal multi-channel network strategy for their growing business. In consideration of parallel strategic business investments, the decision was made to expand both existing DCs. This allowed the company to defer capital investment in a third DC by two additional years while expanding capacity to enable new store and e-Commerce channel growth. By leveraging both DCs and ship-from-store fulfillment, the company has the flexibility to respond to demand regardless of what channel it comes through. Fortna’s network analysis and omni-channel fulfillment strategy provided a five year strategic roadmap that enables this retailer to meet aggressive growth projections and with a payback in less than three years.
Improving Service While Reducing Cost and Inventory: A growing hunting and camping omni-channel retailer was challenged with a “flow through” distribution operating model that relied heavily on vendor performance. Forecast errors and long delivery lead times resulted in excess inventory in stores, missed sales opportunities and lack of confidence in the replenishment process. With 2x growth projections for both stores and e-Commerce, Fortna developed a supply chain and flow path strategy that improved store service while decreasing operating cost and enterprise-wide inventory levels. The new central DC “hold and flow” model impacted more than three weeks on hand (WOH) inventory in the network, resulting in one time savings and over 11% annual carrying costs. The savings were achieved from facility consolidation (reduced shuttle costs, supervision and storage) and incremental profit from reduced stock-outs, markdowns and store transfers. And as a result the client saw a 10-15% increase in DC labor productivity and was able to restore confidence in replenishment with an increase the frequency of store deliveries.