Background
A wholesaler provides inventory to customer accounts using distribution centers across the country. The client provides 98% of dealers in their network same-day or next-day delivery, which means that the ability to move inventory quickly and efficiently is essential to their business.
Like many companies that handle distribution and logistics, the client was aiming to optimize their supply chain operations in order to minimize mark up prices from vendor to consumer while meeting their tight SLAs.
Challenge
In order to reduce inefficiencies in their operations, the client wanted to know which distribution centers should be closed, which should be maintained, optimized or expanded, and where they might build new distribution centers to reduce shipping costs and improve their margins.
The client knew that some of the distribution centers were not optimized, but they weren’t sure what action to take prior to the analytics initiative. Additionally, data quality issues made it difficult for their team to make decisions confidently due to concerns around the accuracy of their data.
Solution
Keyrus partnered with the client to utilize Alteryx to optimize their whole supply chain network.
Keyrus built a comprehensive workflow that transformed data from various sources into the structures needed to utilize an optimization tool. The project involved bringing in their cost and demand projections, formulating their objective function, and modeling their supply chain network costs and constraints.
Building this end-to-end analytic solution required the analysis of over 30,000 variables to determine the optimal solution.
Results
With the new Alteryx optimization tools allowing them to analyze large amounts of data, the client is now able to make smarter decisions on when they should open or close distribution centers in order to minimize shipping costs.
The comprehensive analysis identified locations where third-party managed distribution centers would save them money, rather than expanding another facility. The initiative empowered the client to make operational decisions that continue to save the client $10,000 each week.