Key challenges
The main challenge for this client was figuring out how to cost-effectively scale their online fulfillment operations while deciding how much of their future distribution network should be based domestically versus offshore. This decision needed to consider the changing sourcing landscape and maintain an efficient supply chain.
Our approach
TMX employed specialized modeling tools to analyze various onshore and offshore network options, ultimately choosing the most advantageous one based on cost, service quality, and flexibility. This process involved close collaboration with the client to identify and evaluate seven potential network scenarios. TMX also established the configuration and operation of data center infrastructure, selected warehouse technology, benchmarked current network expenses, and conducted thorough financial evaluations to assess future costs and impacts.
Recommendations for an optimal omni-channel fulfillment strategy were provided, aimed at supporting growth and reducing online fulfillment expenses, alongside developing a phased transition plan focused on maximizing benefits while minimizing risks.
The results
The outlined plan proposed a unified future network capable of managing omni-channel fulfillment while providing complete flexibility in sourcing strategies. The new network was projected to decrease supply chain operational expenses by approximately 18%, ensuring a favorable payback. Moreover, there were immediate tactical improvement opportunities suggested to be implemented, all aimed at funding the implementation cost of the new network.