Distribution Network Optimization

$450M Powersports Distributor

Background

  • Leading distributor of powersports products for motorcycles, ATV/UTV’s, snowmobiles and electric scooters
  • Multiple US distribution centers shipping 3 million packages annually to dealers around the country
  • Competes in a commoditized business in which its customers value price and next-day availability

Contributions

  • Developed network study to determine optimal distribution center locations based on demand clusters
  • Generated network recommendation by modeling fixed, variable and transportation costs associated with each scenario
  • Conducted transportation spend analysis to assess exploring new vendors and modes for improved rates

Results

  • Identified $2.6M annual cost reductions and $1.4M worth of working capital improvements by consolidating and relocating facilities
  • Developed implementation timeline and one-time transition costs associated with executing consolidation
  • Administered RFI and down selected potential 3PL partners
  • Created and distributed detailed RFP to ultimately choose 3PL partner to outsource warehousing and transportation management