Redesigning the distribution network of a regional retailer
We consolidated a fragmented network of distribution centers and reorganized routes to lower cost-to-serve without sacrificing service level.
Results
- -28%
- Logistics cost reduction
- +12%
- Service-level improvement
- 9 → 5
- Distribution centers consolidated
Representative scenario based on logistics transformation projects. Figures are illustrative.
The challenge
A retailer operating across several countries had grown through acquisitions, accumulating a network of overlapping distribution centers. Cost-to-serve was growing faster than sales and nobody had a consolidated view of the flow.
Our approach
We worked on the physical and financial dimensions in parallel:
- Mapped the full network and modeled consolidation scenarios
- Calculated cost-to-serve by channel and by region
- Redesigned delivery zones and primary routes
- Built the business case for the new design with the client's team
The result
The network went from nine to five distribution centers, with optimized routes and an inventory policy differentiated by turnover. Logistics cost fell steadily and, far from deteriorating, service level improved thanks to the operation's greater predictability.