A Supply Chain Optimization Success Story During COVID-19

MercuryGate Blog - Technology Category
Traditionally, shippers use supply chain optimization studies for several reasons. In this example, a customer commissioned Schneider to complete a strategic engineering study. The study would identify the best location and number of additional warehouses to support their growth. This multi-phase project began with a current baseline which was created and validated for each of their six existing warehouse regions. This baseline step had just been completed, when an employee contracted COVID-19. The diagnosis would mean an immediate shut down of their mountain-region facility for at least two weeks, per guidelines issued by the CDC.
This shutdown had the potential to create huge service issues for the distributor. Because quality service is an important element of the distributor’s business model, priority was placed on ensuring product could still ship. A solution was needed quickly. And the existing network optimization model and baseline scenarios made a fast, detailed analysis possible.
The outcome?
Within three hours, the Schneider team was able to run and deliver the new scenario.
A fully optimized solution, including not only facility capacity constraints, but also inbound, outbound, transfer and handling costs was provided.
The solution saved 55% of the cost when compared to a simple miles-based solution while ensuring no future capacity issues for the other facilities because of the additional volume. There was no additional increase to transit time, which meant service would be acceptable. The output from the model was then used to predict volume by facility which allowed for better staff and labor planning for the open warehouses. And additional carrier capacity was added to cover the new shipping lanes, ensuring everything was shipped on time.
As you think about the value of supply chain engineering, it’s important to consider both the strategic and tactical answers it will provide your business. An up-to-date model can also help you manage disruptions.

For additional information or to get started with your own supply chain project

Brandi Goodman
Business Enablement Lead
Schneider
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