Background & Challenge
A subscription-based retail company ships boxes to 600,000 customers across the United States each week. The business relies on a number of shipping carriers to deliver boxes reliably and efficiently. The shipping method and carrier for each box was selected by default based on the destination’s zip code rather than an intelligent solution that could assess a number of factors.
The company sought to optimize their supply chain operations and minimize the cost of distributing boxes to customers. To accomplish this in a quick and efficient way, they chose the leading data blending and advanced analytics platform Alteryx.
As a close partner of Alteryx with experience in supply chain analytics, Keyrus took on the project to assist in productionizing and further developing their proof of concept (PoC) model. The project’s goals were to evaluate the optimization challenge and business objectives, assess the PoC, and implement an automated workflow that would save significant cost.
Solution
Our team implemented an Alteryx workflow that developed cost data for different shipping methods. Unlike the previous system, the workflow included box weight, which significantly affects shipping costs. It also connects to Google sheets, Big Query, and various APIs to calculate the shipping costs for every possible method. The company can run the workflow once a week to adjust the shipping carriers and select the most economical option.
Although we were initially focused solely on shipping costs at a box level, we also assessed delivery truck utilization in order to further optimize supply chain operations. The company pays for each truck they use, therefore it’s often more beneficial to sacrifice cost a box level to eliminate a truck entirely.
The solution produces an Excel report every week to summarize all of the needed boxes and trucks, then sends this information to shipping carriers as well as to their own internal packing facilities.
Results
The company now uses an intelligent workflow that helps optimize their supply chain. At a box level, the workflow saves $30,000 each week in shipping costs. Optimizing at the truck level saves an additional $10,000 each week. The automated report saves two days of work each week for one full time employee. Together, these results were significant enough to gain the attention of top management, who recently asked Keyrus to assess efficiencies in other business lines. We look forward to continuing our work together.