Abstract

SDLC Partners engaged with a national retailer to save on shipping costs. By combining actual sales and inventory data with planning and purchase order information, the client was able to accurately gauge the most cost-effective delivery options. Through this process, SDLC identified approximately 1.2 million units that were available to be shifted from Air to Sea at a savings of $2/unit. This change had a zero impact to available quantities of product within the stores and resulted not only in a new process, but significant savings.

The Challenge

Shipping undoubtedly costs retailers time and money – a significant amount of money. A large clothing retailer was struggling with this increasing cost which was beginning to affect its bottom line. This particular retailer faced a number of significant challenges in its quest to select the most cost-effective method for shipping product while maintaining speed to market. Challenges included:

  • Lack of information surrounding the most cost-effective shipping mode for products
  • Ability to gauge the delivery needs based on expected inventory per store
  • No clear vision or strategy for shipment

The Solution

The client engaged SDLC Partners to assist with a process improvement plan. SDLC’s team of Business Intelligence experts was able to utilize past experience with the client to recommend a more cost-effective method. By combining differing sources of data to provide a “systematic recommendation” of items, SDLC pinpointed 1.2 million units that could be shipped by Sea (freight) rather than by Air at a savings of $2/unit. This recommendation was based on analysis which allowed for zero impact to the supply lines that were already in place. SDLC combined data from LW Sales, TW Sales, Current Inventory, Projected Sales, Weekly Inventory Targets, Current Purchase Orders, Transit Time Information, and Forward Weeks of Coverage which enabled the recommendations to be presented at a low level of granularity or rolled up to the highest level, depending upon client needs. Now that the data was turned into actionable information, SDLC was able to clearly recommend the best option for the client.

The Results

By analyzing the more clearly defined data, SDLC created visibility to the shipping methods of all units allowing the business to make informed decisions. This has changed the method of determining the shipping mode for the planning department which has directly and positively affected the bottom line for the client with potential cost savings of $2.4 million.

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