Retail logistics strategy

Challenge

A Swedish retail company with 100+ stores in Scandinavia needed to develop a new logistics strategy to meet expected growth of 100% in five years. The project scope covered sourcing and material planning, warehouse capacity and efficiency, stock availability, transport cost and lead time. The most ambitious field regarded the warehouse where the target was to increase productivity by 30%, with or without automation.

Solution

After only a short while it was apparent that the new logistics concept realised dramatic results:

‍

Increased warehouse productivity ~ +35%
Reduced cost for “external buffer stock”
Reduced throughput time which directly leads to increased flexibility by shorter response time

These results allows the client to postpone investment in new-/ relocation to new facilities for at least another 2 years.

Impact

MYSIGMA developed a new holistic concept for the warehouse operations so that the overall performance would not suffer from sub-optimisation of any specific aspect. To achieve the required performance boost of 30%, through levelling workload over daily- and weekly cycles and eliminating all “waste” activities, a complete new methodology for item classification was introduced together with a new layout of the buffer-, picking- and storage zones.