Our client, a fashion and home e-commerce business with a highly-automated 650k sqft warehouse, made an acquisition to expand its category offering.
We built a bespoke model to understand the impact that the additional sales and inventory storage requirements would have on the current warehouse operation, and where processing capacities would be pushed to the limit.
We also worked closely with the C-suite and department heads to identify options and enable collaborative decision-making to increase the warehouse capacity, focusing on peak demand periods. The output was a 5-year strategy setting out how to best use the existing facility to support future growth.
Navigating inventory challenges faced by a new business acquisition
When the value of a retail business acquisition includes asset consolidation, a key challenge is how to best integrate new stock into an existing warehouse operation.
This can become even more critical when it involves an automated storage and retrieval system (ASRS), which when overfilled can slow down the entire operation and cause delays.
In the middle of large acquisition integration, our client was facing the potential that their ASRS would soon reach maximum capacity. This was especially problematic because any product that they would be forced to pick outside of the ASRS would have much higher associated costs.
We worked with our client to translate sales forecasts into what would be required of each supply chain activity, enabling a strategy to prepare for integrating additional stock whilst minimising disruptions.
A quick solution was required, so we built a model for operations to understand what levels of stock would take the automated storage over capacity and therefore be required to be stored and picked from an overflow area.
With levels of excess stock maintained outside the automated storage, we carried out a deeper analysis on customer orders to inform discussions on the most effective storage for each size and category of sku. This provided the business with a means of keeping the right stock in the ASRS to keep warehouse operating costs down and continue fulfilling next day delivery promises, whilst integrating the acquired business.
Developing new processes to cope with an expanding product range
Our FMCG client was experiencing rapid growth both in the volume of sales but also in the size of its product range, causing their warehouse to be under great pressure. The challenge was of two halves: answering how much storage space was required to house the increased range, and where to locate each of the picking locations.
Given forecast volumes, sku dimensions, and stock targets (adjusting for headroom), we could answer both how much storage space and what combination of pick locations would be required. The trickier challenge was to understand how to manage the pick locations as sales volumes grew in order to minimise the distance of the pick routes…
Through a combination of modelling, heat maps, and simulation of the overall storage requirements week-by-week, we built a toolkit that allowed the site to manage their storage locations on an on-going basis.
