Supply Chain Transformation in the Retail Industry

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Summary

A leading, big-box retailer was undergoing a supply chain transformation and looked to Sagence for our expertise in supply chain transformation in the retail industry. Sagence designed a supply chain transformation framework that accelerated the process and bred a culture of innovation in our client’s supply chain group.

Challenge

A nationally recognized big-box retailer was undergoing a supply chain transformation in order to provide just-in-time inventory replenishment to all new and existing stores. As a result, their distribution centers would be required to manage individual pieces of inventory in order to support limited store backrooms, city delivery, 98% on-shelf availability, and 24-hour replenishment timelines. Ultimately, all distribution centers and stores were to function as interoperable nodes in a highly connected supply chain. The proposed supply chain would need to be built from the ground up, as current distribution centers, stores, and third-party logistics providers were not equipped to deal with just-in-time replenishment.

Solution

Sagence prepared the executive leadership team with a series of design sessions and the creation of a thorough supply chain transformation framework. We segmented the end-to-end supply chain into manageable divisions, with all relevant decision points identified.

Multiple use cases were developed to support direct-to-store, direct-to-guest, non-retail, and reverse logistics scenarios. Our team identified outstanding decisions about warehouse design, real estate selection, batching, picking, packing, loading, transportation, stocking, city delivery, and last mile. We captured assumptions, dependencies, metrics, risks, and exceptions. Additionally, Sagence researched competitors, startups, and investment trends in the supply chain space to inform stronger design decisions and to identify potential partnerships.

Results

The retailer’s executive management utilized Sagence’s expertise in supply chain transformation in the retail industry to guide a series of workshops to build a future-state supply chain. Sagence facilitated accelerated supply chain transformation timelines, as a significant portion of the design work had been thoughtfully structured. The retailer used our competitor research to navigate successfully around standard just-in-time replenishment and city delivery pitfalls. Furthermore, our startup and investment trends research bred a culture of innovation in our client’s supply chain group.

 

Tom Mech is a partner with Sagence and leads our Retail Practice. Contact us to learn more about Sagence’s expertise in supply chain transformation in the retail industry and how we can help you align your data and business strategies.

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