Retail
One Day to Every Store, or Two Warehouses
A pet and farm supplies retailer compared distribution networks on real road distances and identified a 10% cost avoidance.
Read the case studyThe Question
How much warehouse capacity will we need over the next decade?
Case study · Apparel · Warehouse capacity
ConfidentialClient work product
Ten years of warehouse capacity in thirty seconds
Client's brief · reconstructed excerpt · values held in confidence
(withheld) designs and sells apparel and moves it through a network of (withheld) distribution centers. Supply arrives by sea on long, unpredictable lead times, much of it in large lots at the start of each season, and some of it never sells. Leadership has a ten-year strategic demand forecast. What it does not have is a way to turn that forecast into the storage and throughput each warehouse will need, year by year, in a form its stakeholders will approve, or a way to see what opening or closing a distribution center would do to the rest of the network.
Bars cover values SimWell holds and is not releasing. The released figures stand as printed.
§ 1
The decision
Warehouse capacity takes years to add and is expensive to hold empty. Secure it late and the network runs out of room in peak season. Secure it early and capital sits idle.
Simple projections fell short because they miss what makes apparel hard: long and unpredictable supply lead times, supply landing in large lumps at the start of each season, and slow-moving and obsolete stock that keeps taking up space after it stops selling.
§ 2
The questions behind the number
Before anyone could defend a capacity figure, the planning team had to answer a chain of questions:
- How does a long-term strategic forecast translate into throughput?
- How large are the peaks and valleys that variable demand and supply create?
- How much room does unsold or slow-moving inventory take?
- Which levers reduce the capacity and inventory the network needs?
- What happens to every other warehouse if a distribution center opens or closes?
And one more: how to convince stakeholders that the requirement is real.
§ 3
What the model did
SimWell built a simulation of the client's warehouse network and calibrated it against real data. It takes the long-term strategic forecast as its input and generates the daily demand at each inventory point, the daily supply arrivals at port, and the daily transfers between distribution centers.
Planners set the weeks of coverage for each warehouse on screen and track unsold stock as it ages into obsolescence. They press play and watch ten years of inventory build in every warehouse, with a live dashboard of the key indicators. A full decade runs in under 30 seconds, and the results flow into Power BI for reporting.
Cleared for release
Results
The client now has one centralized process for estimating storage and throughput capacity in every warehouse ten years out. It tests scenarios such as opening or closing a distribution center against the same forecast, and it used the model to make its capacity case to stakeholders.
SimWell helps operators make better decisions under uncertainty. We build simulation and optimization models that reflect operational reality, test scenarios before committing resources, and transfer capability so teams can run decisions independently.