“Do More. Cost Less.”
Accretive said: Analyze our distribution network to determine the optimal number of, and locations for our distribution centers; we want to better serve our Tier 1 customers and reduce distribution expense by a target of 25%.
Scott Sheldon engineers said: We can do that.
Accretive Commerce needed to move quickly because their facility and customer contracts were set to expire. The assignment was to identify optimal locations, choreograph distribution center moves in time with contract expirations and leverage those moves to expand business with their customer base.
To meet these goals, Accretive Commerce needed a provider that could develop, execute and manage a holistic cost reduction strategy that would improve service.
The “ah-ha” moment
The Scott Sheldon team analyzed historical shipping data and determined that 90% of shipments were parcel (UPS/FedEx). This meant that customers could easily be moved between facilities to consolidate locations and improve space and operational efficiencies.
The engineers at Scott Sheldon applied their package evaluation methodology and executed it in a 3-step approach:
- Data analysis: reviewed customer shipping history, volumes, centroid analysis, labor rate assessment and transportation structure.
- Location acquisition: with potential locations identified, we applied demographic data and local/state government incentives.
- Applied business intelligence: including customer contracts, supplier locations, facility exit costs, etc.
Accretive Commerce will save more than $500,000 each year by consolidating their network from seven locations to five. They renegotiated carrier contracts in order to provide improved service at a lower cost and used Scott Sheldon’s tune-up approach to improve WMS capabilities. The result? Higher customer fill rates and improved shipment accuracy.