Shipment Cost Simulation Case Study

Evaluate your Network Design with realistic transportation costs.

The Challenge

Without any knowledge of transportation costs in new markets, the company needs to decide whether to use a centralized or decentralized warehousing system.

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The Journey

A step-by-step way from potential shops’ locations in new markets to an ideal warehousing system.



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The Solution

By simulating transportation costs of different scenarios in Shipment Cost Simulation App, company chose ideal warehousing system.

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Benefits

Reduced transportation costs by avoiding international cross-docking shipments, stronger consolidation of the flow, increased service level.

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Supply Chain Apps Case Study: Shipment Cost Simulation

The Challenge

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Supply Chain Apps Case Study: Shipment Cost Simulation

The Journey

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Supply Chain Apps Case Study: Shipment Cost Simulation

The Solution

Based on the shops’ locations in new markets and warehouse locations, we created a couple of scenarios. First, we calculated shipment costs from a centralized warehouse in Lille to all shops’ locations. These costs are used as a base and compared with different decentralized warehouse options.

We simulate scenarios with distribution centers in Lille and Lyon, then in Lille, Lyon and Bordeaux, and in Lyon, Bordeaux and Strasburg. When compared with a base, scenario 03 generates the most savings (25,29%).

Based on this, the company decided on using a decentralized warehousing system with distribution centers in Lyon, Bordeaux and Strasburg.

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Supply Chain Apps Case Study: Center of Gravity

Benefits

✔️ Reduced transportation costs by avoiding international cross-docking shipments.

✔️ Stronger consolidation of the flow to the final cross-dock points where the shipments will be distributed.

✔️ Increased service level.

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