Supply Chain Modelling - for Retail

By Lexian Solutions


Top Retailers Adopt CAST
The world's largest retailers typically use CAST to annually budget and identify the optimal distribution infrastructure for their national supply chain networks, in line with new store openings each year and as component supply chain costs such as wages, diesel and rent change. These companies include the number one grocery retailers in the US, UK and Canada. Retailers not only want to establish the optimal warehouse infrastructure and distribution to their stores in terms of cost and service, but also they will also want to see which product lines should be held, where, in the network.

More recently, this has included the evaluation of supplier deliveries into the network, whether to deliver to store direct from the supplier versus the benefit of bringing those volumes into the retailer's own distribution network, merging with deliveries not going direct and benefiting from the resulting transportation savings arising from better load utilization. The explosion in internet driven home delivery shopping has also seen retailers use CAST to evaluate and develop new supply chains for the domestic home market.

Barloworld Optimus recently participated in a retail industry and government supported consortium (that included John Lewis, Cranfield University, the Highways Agency and the Department for Transport) whose project aim was to improve the efficiency of the rapidly expanding home deliveries market in the UK. A national home delivery model was developed in CAST using a combination of actual and synthesised data from delivery companies and grocery retailers. Scenarios were then run to assess the impact of changing loading time, delivery time, duty time, vehicle capacity, vehicle size and cross-industry freight consolidation opportunities. Consolidation of the grocery and small parcel industries identified a potential 5% saving. It was also identified that unloading times were a key driver in resulting fleet requirements and costs. This led to further project investigation into practical delivery time reduction opportunities resulting in recommendations related to Proof-of Delivery systems, RFID tagging and optimised vehicle layout and e-stop delivery locations.
CAST in Action

Sainsbury's purchased CAST to perform strategic analysis on their distribution network. Initially, they needed to determine the optimum number and location of Regional Distribution Centres (RDCs) for the future. CAST allowed to investigate where they should site future RDCs and to measure the impact of opening or closing an RDC on the rest of the supply chain. They have used CAST to identify the potential locations of intermediate warehouses and to find future opportunities to improve their primary distribution network. CAST has helped to identify where financial savings are possible.

A significant number of major national & global clothing retailers also use CAST to design supply chains for new overseas markets that they are expanding into, for example the GAP used CAST to establish the optimal supply chain when they entered the French & Japanese markets.

Increasingly, western retailers are reaching saturation levels in their domestic markets and as they begin to look at exciting retail opportunities in the rapidly developing consumer markets of China, India and Brazil, they turn to Radical to offer local supply chain modelling expertise & capability to help shape their retail development & subsequent logistics support strategy in those regions. CAST was used recently to establish an optimal DC configuration for a UK hard goods (DIY) retailer in China, based on their existing and forecasted store openings in the country. This followed similar studies for the retailer in central Europe.
Customer Quote:

“We are pleased with our investment in CAST, which is proving valuable in our strategic planning. The value of the software is increased, however, with the addition of the Support programme. It is indeed refreshing to find a software supplier who continues to respond to customer needs long after the initial sale has been concluded. ”
Richard Adams, Business Improvement Co-ordinator