FORTE Tested Various DC Combinations to Determine Optimum Path for this Home Improvement Retailer

The Challenge
This home improvement retail company distributes building materials, home improvement supplies and outdoor products to its network of more than 1,000 stores.

Double-digit growth was taxing capacity in the existing DC network. Their one-day customer service goal was only being met 84% of the time and as new stores were added, those service levels continued to decline.

The Solution
FORTE identified a go-forward strategy for expansion by creating a model to simulate the effects of market growth on outbound transportation cost and service levels.

They tested various geographic DC combinations to determine the optimum path for this retailer.

The Result
The model identified that the addition of two new DC’s would reduce their transportation costs by 21% and improve their one-day customer service levels from 84% to 99%.

This new footprint would support additional growth for at least 5 years.