Major Home Improvement Retailer
Concurrent Planning of Inventory, Fulfillment & Transportation

Home Depot
2000+ Stores
800+ Vendors
500,000
Shipments/Month in NA

Goals

Minimize the total cost of the supply chain network while ensuring SKU x Store availability targets are met

Determine optimal order quantity by considering trade-offs between inventory holding and transportation costs

Challenges

Conflicting KPIs among functional silos: store operations planning high availability through more frequent shipments vs. logistics reducing costs through more frequent FTL shipments vs. inventory management reducing inventory investment in the network

Fixed order schedules and static transportation planning limiting the ability to respond to seasonal or structural changes

No quantitative basis for network-wide improvement initiatives

Diverse SKU portfolio and vendor capabilities requiring different operating models and different planning parameters

Benefits

Internally consistent planning parameters related to order frequency, transportation mode, flow path, and availability targets for each SKU

What-if analyses on the transportation cost and inventory investment to meet availability targets

Total Cost to Serve optimization with explicit trade-offs among inventory, transportation, and store operations

Savings in annual inventory and transportation costs while maintaining store shelf availability

$ 105 M
Recurring inventory & transportation cost savings

Solutions

5/5