Center of Gravity Case Study

Do you know the right number or location for your DCs?

The Challenge

Company’s policy to ship all the orders directly from the factory in addition to store’s shortage in storage space led to severe customer’s complaints.

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The Journey

A step-by-step way from store’s base to ideal DC’s locations.



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The Solution

By running multiple Center of Gravity analysis and comparing different scenarios, company found ideal number and position of DCs.

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Benefits

Achieved shorter lead time, stronger delivery policy and better cost efficiency of transportation.

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Supply Chain Apps Case Study: Center of Gravity

The Challenge

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Supply Chain Apps Case Study: Center of Gravity

The Journey

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Supply Chain Apps Case Study: Center of Gravity

The Solution

Based on the store's locations and the number of orders, we ran multiple Center of Gravity analysis to create different scenarios.

Scenarios with 2, 4, 5 and 8 centers were compared based on the distances from distribution centers to stores. In order to fulfill the “24h in-store-delivery” policy, DCs must be in a range of 480 km from stores.

The results showed that the company should rent 4 distribution centers near the customers that order the most, instead of shipping everything from the factory’s site.

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Supply Chain Apps Case Study: Center of Gravity

Benefits

✔️ Improved lead time.

✔️ Allowing stores to introduce the new “24h in-store-delivery” policy.

✔️ Reduced number of complaints.

✔️ More efficient inbound transportation by using only FTL’s deliveries.

✔️ Lower outbound costs due to positioning distribution centers next to the stores with high order frequency.

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