The retailer faced major challenges with days-in-inventory and capacity at its distribution center (DC).
- Days-in-inventory time continued to increase over the prior five years
- The single distribution center experienced overly high storage levels, delays with unloading railcars and shipping containers, and an overall worsening in port-to-DC transit times (hovering around 40 days).
Noatum Logistics analyzed the retailer’s:
- Inventory holding costs
- Asset utilization (distribution center capacity)
- Order fulfillment cycle
- Transportation optimization.
From this analysis, Noatum Noatum Logistics recommended the customer begin using direct-to-store purchase orders (POs). Direct-to-store POs would allow the customer to fulfill orders from regional warehouses, which would improve its distribution processes. The Noatum Logistics flow through network, coupled with the extensive transportation networks of the Noatum Logistics Worldwide companies, is well equipped to support this strategy. In addition, Noatum Logistics could allocate all origin, transportation and destination services into a single cost on a per-item basis.
- China-origin consolidation services
- Ocean transportation services
- U.S. destination flow through/deconsolidation services
- U.S. Customs brokerage services
- North America less-than-truckload (LTL) transportation services
The first project to use the regional fulfillment center model was for the delivery of 440 All Terrain Vehicles (ATVs) to 52 stores. Noatum Logistics achieved an average port-to-store transit time from Shanghai, China of 31.5 days. This reduced by
approximately 8.5 days the average DC performance for the customer. Other benefits for the customer included :
- Elimination of DC handling
- Transit time savings
- Cash-to-cash benefits and the potential to issue purchase orders and transfer funds to the customer’s vendors later in the cycle
- Ease of implementation.
The Noatum Logistics global solution is scalable, flexible and lets the customer respond to regional logistics needs.