Distribution Center Operations Assessment Yields $36.4M in Savings

A rapidly growing $100M+ e-Commerce distributor with a large distribution network across multiple e-commerce platforms ran into capacity constraints due to lack of warehouse space and a large amount of slow-moving inventory, hindering their ability to meet expected growth targets

The Challenge

With over 7,000 SKUs and plans to bring on an additional 1,500+ SKUs per year, the company lacked formal processes around inventory target setting, rationalization strategies, and methods to optimize their warehouse space.

With significant growth anticipated, TriVista was brought on to develop inventory and warehouse processes and provide future growth strategies.

Our Approach

TriVista used a three-phase approach for operational improvements:

• Phase 1: Inventory Optimization
  • Current inventory was optimized through statistical data analysis, implementation of improved inventory processes, and data integrity check protocols
• Phase 2: Warehouse Space Management
  • Translated inventory reductions into quantified space to free up for future growth
  • Warehouse space was optimized through site measurements and Gemba processes
• Phase 3: Development of footprint/space plan for future growth
  • Analyzed current state and developed future state floor plans and space plans to accommodate future inventory targets, and predicted growth through use of heatmaps and space allocation

The Results

• $5.1M in savings through reductions in direct labor costs due to improved primary picking location layout and storage methodologies
• $30M in savings through supplier relationship management, NPD process development, forecast accuracy improvements, and inventory target setting
• $1.3M in savings through improved utilization of available warehouse space to eliminate 3rd party warehousing
• Implementation of obsolescence and liquidation plans allowed for increased usable inventory space without significant existing space changes
• Developed five-year space strategy