Six-figure savings from improved supply chain efficiency

Visual insights drive fact-based vendor negotiations

  • Visual analytics: leveraged data perceived to be too complex
  • Complex model: delivered in 3 months, unlocking opportunities
  • Return on investment: greater than 500% in first year

SKU stock location and routing: required review

A large UK retailer had invested in a large National Distribution Centre (NDC) warehouse, adding to its Regional Distribution Centre (RDC) network. Suppliers were invited to move lines into the central location. Stocking decisions were based on both commercial and logistics criteria. As sales grew and available capacity in the logistics network began to fall, the business questioned the ideal location for each SKU, based on its actual demand pattern. A new project explored the most efficient stock decisions with the least commercial impact. The complexity and volume of data relating to SKU demand, supplier shipment locations, stockholding requirement and internal costs meant typical analytical tools were not fit for purpose.

Visual model: easy to spot the optimum solution, for all 700 vendors

The business needed a way to visualise and model these complex and sometimes subtle interactions across 700 vendors to:

  1. Determine the most cost effective location for each SKU, ensuring item availability while minimising stock holding
  2. Be in a position to renegotiate with suppliers based on neutral facts, extract value and minimise any commercial impact on existing logistics terms

Working through millions of Excel lines was impractical. Instead, Atheon Analytics worked with The Business Consultancy to provide a visual model that commercial managers could use independently to easily spot the correct distribution approach for each of the 700 vendors. The highly visual system made each scenario easy to share with vendors, building trust and protecting commercial terms.

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Democratic visual approach drove changes in behaviour

The visual model helped bridge the traditional divide between merchandise and replenishment teams. The resulting collaboration delivers a complete and holistic message to the supplier base – and increases revenue and profit. The value of this bespoke piece of work is now being reviewed for potential delivery as a weekly serviced model.

 
Atheon delivered ‘simplexity’: simple outputs with clear
and meaningful insights from a hugely complex challenge,
with multiple variables and massive data. They
understand the business model inside out, designing a
strong operational spine to underpin the logic and
analytics
— Derrick Keating - Director, The Business Consultancy

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UK Retailer Case Study PDF version