Supply chain
ICP Group: Distribution Network Redesign
ICP Group tested distribution center counts against coverage before committing to a network.
Read the case studyThe Question
Where should a growing retailer put its next distribution centers?
Case study · Retail · Distribution network design
ConfidentialClient work product
One day to every store, or two warehouses
Client's brief · reconstructed excerpt · values held in confidence
(withheld) sells pet and farm supplies through a regional chain and is growing fast. Most of its stores sit on a peninsula in (withheld), and the plan calls for close to a hundred stores and an expansion east. Several hundred suppliers ship into the network. The open question is where the distribution centers go: near suppliers keeps inbound freight cheap, near stores keeps service high. Leadership wants a design that holds through five years of openings, and it has brought in (withheld) for the operational and financial case and SimWell for the network modeling.
Bars cover values SimWell holds and is not releasing. The released figures stand as printed.
§ 1
The decision
A distribution center placed for this year's stores can be the wrong answer by year five, because every year adds stores the network has to reach. Spreadsheet financials can price one configuration at a time. They can't compare thousands of them, or show how a choice made for year one holds up in year five.
§ 2
Two questions
Leadership asked two things. How many distribution centers would it take to reach every store within one day? And if the network stopped at two, where should they sit?
Both depend on real driving distance. On a peninsula, straight-line distance puts trucks on the water.
§ 3
What the model did
SimWell worked in anyLogistix in two passes. Greenfield analysis used supplier and store locations and volumes to propose how many distribution centers the network needs, and where. Network optimization then costed every combination of those candidates on real road distances and ranked them.
The team alternated between the two, ran the comparison across multiple years so a year-one design was tested against later store openings, and refined the options with the client's feedback at each round.
Cleared for release
Results
Hundreds of network permutations came down to a few comparable, viable designs, each with its road-based transport and operating cost and its trade-offs laid out. The design the client identified carries a 10% cost avoidance.
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.