To define the ‘large product’ logistics vision for a major digital retailer

Business targets

Define the ‘large product’ logistics vision including a review of the use and layout of the large product NDC, ‘profit to serve’ SKU modelling, opportunities for improvement and an assessment of the changing ‘Two Person’ delivery market.

• To find a future use for the large product NDC by reviewing the ‘contribution. cube’ (profit to serve) of the stored product range versus drop ship.
• To define the optimal layout and flows for the site.
• To identify continuous improvement opportunities to reduce operating cost.
• To provide a market assessment with latest customer proposition trends in ‘Two Person’ delivery.

Our approach

• Project kick off workshop with clear scope of works, deliverables and timeline agreed.
• Detailed datasets capture to understand changes in Two Person logistics volumes & cube.
• End-to-end process walk of warehouse operations to understand current processes and site layout.
• Collaborative development of a contribution cube / profit to serve tool to. understand which products at SKU level do not generate profit and should be moved to a drop ship model.
• Redesign of the current layout and flows to optimise the use of the site and generate further profit.
• Mapping of continuous improvement opportunities, framed by value and ease of access.

Outcome

• £0.5m cost avoidance by changing sourcing behaviour / order placement frequency.
• Up to £1.2m annualised savings from continuous improvement opportunities (x15).
• Profit to serve model identified 600 out of 5,900 SKUs for delisting or channel switch, saving at least £0.2m annually.