2K+
Active SKUs
10K
Stores
300+
Vendors
$4.2B
Revenue
Newgistics operated an e-commerce fulfillment and transportation network serving 10,000 stores and 300+ vendors across 2,000+ active SKUs and 50 regions, generating $4.2B in revenue. Its transportation network needed to hold up under volume peaks while still leaving room to grow.
So Newgistics partnered with Solvoyo to build a detailed, cloud-delivered optimization model of its transportation network. The model gave it decision support for day-to-day operations and long-term scheduling alike.
Volume Peaks Were Exposing the Network’s Limits
Service degraded during volume peaks, and Newgistics lacked both reliable forecasts and the analytical capacity to keep improving the network or to price out new prospective customers with confidence. Specifically:
- No reliable forecasts and no appropriate allocation of resources across the network
- No analytical capacity to support continuous improvement of the network
- Too few resources to estimate cost and capacity requirements for prospective customers accurately
These gaps mattered because the network had to hold up under volume peaks while still leaving room to grow.
A Detailed, Cloud-Delivered Transportation Network Optimization Model
Solvoyo built a detailed representation of Newgistics’ current operations, covering hourly shift scheduling, route definition, and timing. Operational, sales, and financial data were integrated into a single, user-friendly interface.
The model was delivered through the cloud, which allowed rapid scenario development with tangible results. Within the model, concurrent optimization covered DC terminal location and capacity, transportation, delivery, lane management, and shift utilization.
The model also included contingency plans for unforeseen events such as weather delays, unplanned shutdowns, and lane closures.
Decision Support for Peak Volumes and 10-Year Growth
The model gave Newgistics decision support for day-to-day operations and long-term scheduling alike. It supported:
- Standard and peak efficiency planning, sensitive to each retailer’s service requirements
- Customer satisfaction modeled against 5- and 10-year growth projections
- Bandwidth for business development, while surfacing long-term network enhancements
What Does This Mean for You?
A transportation network that holds up only at average volume is not doing its job, because peaks are when service gets tested. Modeling shift scheduling, routing, and contingencies together, in the cloud, is what let Newgistics plan for peak volume while looking 5 and 10 years ahead.
If your own network slips at peak volume, or you cannot estimate cost and capacity for a new customer with confidence, Newgistics faced the same problems. Its answer was a detailed model of shifts, routes, and contingencies, delivered in the cloud.
About Company
Newgistics operated an e-commerce fulfillment and transportation network serving 10,000 stores and 300+ vendors across 50 regions, generating $4.2B in revenue.
Achievements
Concurrent optimization of DC location, transportation, and shift planning
Contingency planning for weather delays and lane closures
Scenario planning against 5- and 10-year growth projections
Don’t take our word for it
Even though our main goal as an e-commerce retailer was managing growth after we went live, with Solvoyo our inventory turns improved by 61% while our availability increased by 44% and our sales almost doubled.
Using Solvoyo’s Markdown Optimization solution, we now can achieve different business objectives. With an AI/ML predictive life cycle forecasting engine, Solvoyo prevents us from taking unnecessary discounts and thus, minimizing margin lost.
Cash flow in e-commerce is extremely important; the more free cash we generate, the better we operate. It is extremely important for this type of business.The savings run into the tens of millions of dollars.
