After being deemed ‘essential’ in most countries, a large home improvement retailer has kept its stores open with adjusted business hours during the COVID-19 crisis. To accommodate operating adjustments and prepare for other potential disruptions like distribution center closures due to infection or changes in legislation, the company needed the ability to model a range of scenarios to ensure that it could keep products flowing to its 2,000 stores and dynamically adapt its distribution network in response to any disruptions.
In order to determine how their DC to store network might need to be adjusted, the retailer first developed scenarios to establish which DC was the second and, in some cases, the third best option to supply each store in the event their primary DC was impacted.
Within two business days, LLamasoft developed and demonstrated a custom application that realigned DC/store assignments based on changes to DC capacity. Taking data from existing supply chain models, they showed the total cost impact, a change summary and a map illustrating the geographic impact of the DC/store assignment shift, in addition to a graphical DC capacity summary. Flexible contingency scenarios were also created to allow for easy analysis of capacity reduction at individual DCs in addition to more robust analytics to model situations where inventory could be forced or disallowed at specific DCs.
With this solution, the retailer now has a way to rapidly analyze and effectively react to massive capacity disruption within its network even as the operating environment continues to change. With revenues across the entire retail sector already taking a massive hit and no clear end in sight, the relationship with LLamasoft is allowing the company to quickly find the optimal store/DC assignment, minimizing both cost and disruption as it continues to provide essential products to serve changing customer needs.
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