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Enabling Strategic Vision Through Network Design
Technology Category
- Analytics & Modeling - Predictive Analytics
- Functional Applications - Transportation Management Systems (TMS)
- Functional Applications - Warehouse Management Systems (WMS)
Applicable Industries
- Healthcare & Hospitals
Applicable Functions
- Logistics & Transportation
- Warehouse & Inventory Management
Use Cases
- Fleet Management
- Supply Chain Visibility
- Warehouse Automation
Services
- Software Design & Engineering Services
- System Integration
The Challenge
Over the past decade, the specialty healthcare distributor had undergone substantial growth by expanding existing product lines and acquiring complementary businesses. The current single point manufacturing and distribution footprint had become stretched as the organization was supporting over two-thousand end customer locations across North America. This further manifested in their primary East Coast distribution center which suffered from significant capacity constraints. Also, on the West Coast, the organization felt pressures of both increased distribution cost and expedited customer delivery expectations. In addition, two factors added complexity to the distribution network. First, many products had inherently different manufacturing and distribution requirements (i.e. lead-time, manufacturing processes, etc.). Second, different customer types had unique demand profiles for specific items (i.e. order sizes, shipping times, etc.).
About The Customer
Houlihan Lokey is a global investment bank with expertise in capital markets, financial restructuring, and strategic consulting. They were commissioned by one of North America’s leading healthcare distributors to help revitalize their distribution operations. The healthcare distributor had undergone substantial growth over the past decade by expanding existing product lines and acquiring complementary businesses. They were supporting over two-thousand end customer locations across North America, which led to significant capacity constraints in their primary East Coast distribution center and increased distribution costs and expedited delivery expectations on the West Coast. The distributor's network was complex due to the varying manufacturing and distribution requirements of different products and the unique demand profiles of different customer types.
The Solution
Given these changing variables, a new fit-for-purpose distribution network needed to be developed. The anyLogistixTM platform was chosen by Houlihan Lokey Strategic Consulting to be the primary engine for designing a new distribution network due to the software’s robust modeling capabilities and its ability to account for the project’s various complex supply chain requirements. Furthermore, the combination of a straightforward user interface, extensive documentation, and a dedicated customer service team gave Houlihan Lokey confidence that the anyLogistixTM platform would be the best fit solution. To renovate the distribution network, the following objectives were established: reduce variable operating costs (i.e. transportation, handling), improve service levels with a focus on shipping times, and limit the amount of capital investment (i.e. new facilities). The model designed by Houlihan Lokey utilized the distributor’s transactional records over the prior year to represent demand in the model. This included data from all the organization’s current distribution facilities located in the US and Canada. To plan for future distribution requirements, various growth scenarios and supply acquisition volumes were modeled within the anyLogistixTM platform to target specific geographic regions and product lines. Leveraging the anyLogistixTM “Greenfield Analysis” network design experiment, Houlihan Lokey was able to determine the optimal distribution footprint considering multiple network configurations including point-to-point and hub & spoke distribution. The anyLogistixTM platform was able to incorporate the organization’s requirement to allow certain customers and products to be serviced by specific distribution facilities. This was vital as it allowed the company’s complex customer and product requirements to be fully considered throughout the network design process. In the end, the anyLogistixTM platform enabled the creation of several distinct design scenarios which were then ranked according to the objectives laid out for the distribution network design project.
Operational Impact
Quantitative Benefit
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