- Case Studies -
a fast-growing US grocery retailer
Operating 5 Distribution Centers throughout the US
Data-guided growth and expansion
This fast-growing grocer needed guidance on how to intelligently invest their dollars and expand their distribution.
Background
With throughput requirements increasing at a rapid pace due to consistent retail network expansion, this retailer quickly began experiencing capacity constraints and all the associated adverse labor efficiency affects. With a marked increase in direct labor tasks associated with putaway and replenishment, along with a noticeable surge in dock and staging lane congestion, they quickly realized their operation was not scalable.
Syncontext’s solution was selected to not only help determine a scalable and effective growth plan, including facility sizing and optimal material handling solutions, but also to help track financial performance and forecast requirements in a more scalable and proactive way.
Approach
After a detailed review of operational data, existing material handling systems, and expected future retail store growth, the plan of action was clear. Not only were expansions to existing distribution operations needed to keep up with growing throughput levels but a review of current retail clusters revealed that two additional fulfillment operations were needed to better service fast-growing geographic regions.
With these changes, and the level of investment required, the executive team wanted to ensure that the expected increase in labor efficiency and resulting decrease in cost per case was not only tracked but anticipated. The executive team wanted to provide supervisors with a way to more effectively plan labor requirements, by function, and illustrate the impact of each and every shift on the company’s bottom line financial results.
- Assessment of improvement opportunities with Syncontext technology
- Expansion planning
- Slot optimization to maximize existing capacity
- Size and slot two new DCs
- Shift planning
- Real-time performance tracking
Solution
Leveraging our solutions modeling capabilities, we were able to effectively size expansion requirements and provide slot optimization recommendations so the existing capacity could be better utilized. We were also able to effectively size and mass-slot two new distribution operations, both fully optimized from day one.
Our custom solution also provided shift planning and financial performance tracking functionality so improvements in operational efficiency could be tracked in real time.
Impact
$2 million
annual savings
by self-distributing from their own optimized fulfillment facility
$4 million
annual savings + improved service
by designing and implementing two new fulfillment facilities
13%
improvement in direct labour productivity + better financial alignment
through better shift staffing decisions
Final Thoughts
Prior to using our solutions, capacity constraints were causing noticeable declines in labor efficiency and scalability of the organization’s order fulfillment was in question. They were not only able to maximize productivity and efficiency while alleviating capacity constraints at their existing sites, but also provide scalable sizing requirements and optimal slotting for two new distribution operations. Through our custom solutions, this retailer was also able to create a higher degree of transparency and standardization surrounding its direct labor performance expectations – no longer forcing operations personnel to rely only on experience and gut-feeling.
Can you expect similar results?
Let’s find out.
The beauty of our system is it’s entirely based on your company’s real-world data and proven algorithms, no guess work involved. Give us two months of data, we’ll run the numbers, and you’ll learn exactly how much you could be saving each week.
Learn more about Syncontext’s Strategic Opportunity Assessment