Footwear & Wholesaler CASE STUDY
Johnson Stephens Consulting assisted out client who is a wholesale and retail marketer of footwear, headwear, and accessories with brands including Johnston & Murphy, Journeys, Journeys Kidz, Shi by Journeys, Underground Station, Hatworld, Lids, Lids Kids, Hat Shack, Hat Zone, Cap Connection and Head Quarters with the development and analysis of the Supply Chain Network. The client’s distribution center, which services much of their store network as well as some online fulfillment, was quickly approaching capacity and logistics expenses were rapidly increasing due to increasing fuel costs and container rates.
The resulting five year plan included enhancement of supply chain processes such as case pack logistics, transition to regional pool point transportation where beneficial, leveraging use of West Coast 3PL value added services to crossdock to western stores, and optimization of the expense to service ratio by extending the useful life of the existing distribution center. Financial impact achieved expense savings of over $3 Million per year.
Scenarios considered included alternative ports of entry, additional facilities in the Southwest and West Coast regions, leveraging 3PL consolidation services, change of packaging assortment at manufacturing, simplified allocation quantities, regional analysis of pool point transportation networks, consolidation of aging remote logistics centers, and inclusion of non-revenue inventory in the distribution centers.
Our professionals analyzed customer, store, and vendor locations to compare scenarios which included expansion of the existing facility, consolidation of remote logistics operations, and a pinpointed ideal location for an additional distribution center. JSC professionals also evaluated enhanced utilization of existing contracts with West Coast consolidators versus developing an internally operated West Coast distribution center and recommended regional third party logistics services to reduce transportation expense and improve time to market.
The analysis included the client’s aggressive growth strategy, operating expenses for all areas, transportation changes, and expenses for both inbound and outbound freight, material handling equipment costs, and occupancy expenses. All scenarios were compared using a net present value approach and balanced with an examination of achievable service levels for each store.