e-Global FashionNetwork Baseline Analysis

SCMN 4800Michael Bullington

Ben MorganRussell Mann

Mike McManus

The Company: e-Global Fashion• E-Global Fashion is the

hottest new company to provide livable technology-based fashion-ware, leveraging the latest trends in apparel and technology

• The strategy is to expand the inventory footprint by enabling their current retail stores to ship directly to the customer base.

“Wearable tech (still in its infancy) is breaking through in tangible ways and beginning to resonate with popular culture. We're not just talking about watches that

serve as miniature extensions of computers and smartphones, but of apparel people actually want to

wear, marrying function with fashion. Imagine clothing fitted

with solar panels that charge your mobile devices, smart fabrics that

optimize wearer comfort by adjusting color or texture based on environment, or apparel that

purifies the air, omits fragrances, or transforms appearance in

reaction to mood or sound simply for fashion's sake. It's all coming and e-Global Fashion is your tech-

fashion bridge to the future.”- e-Global Fashion website

The Issue at Hand•By shipping from a few select store locations order-to-delivery transit times and transportation costs can be reduced

•Expanded capabilities are: • Point of Sale (POS) technology

in stores. This enhancement facilitated the necessary inventory management components, providing visibility to store inventory with the capability to fulfill and ship from retail stores.

• Inventory management and shipping training across all locations

Transit Zones and DCsCurrent

Origin DC

Order Count

% of Orders

17339 12,021 66.52%90808 6,051 33.48%Grand Total 18,072 100.00%

•Two Distribution Centers:•Lewisberry, PA (17339)•Long Beach, CA (90808)

•Different “Zones” depending on distance from the DC and the service type

Transit Zones and DCs Current Shipment Counts by Zone

and DC Zone 17339 DC 90808 DC

2 1,922 5073 2,117 1874 3,244 7095 3,041 9666 634 1,1317 94 5948 969 1,957

 Total: 12,021 6,051

2 3 4 5 6 7 80

5001,0001,5002,0002,5003,0003,500

Current Shipment Counts by Zone and DC

17339 90808

Transit Zones and DCs

AL AZ CO DC FL IA IL KS LA MD M

IM

O MT ND NH

NM NY OK PA SC TN UT VT WI

WY

0

200

400

600

800

1000

1200 Destination State by Origin DC

17339 90808CA TX NC TN FL

0

200

400

600

800

1000

1200

Transit Zones and DCsCurrent Origin DC Information

17339 DC 90808 DC

Zone Transit Time

Transit Rate Zone Transit

TimeTransit

RateAverage 4.21 2.12 $20.85 5.92 3.12 $29.76

Median 4.00 2.00 $11.62 6.00 3.00 $17.60Standard Deviation

1.61 0.99 $24.47 1.91 1.06 $34.54

Service Types•Six service types:1. Priority Overnight (PO)2. Standard Overnight (SO)3. 2Day (E2)4. Express Saver (XS)5. Ground (GR)6. Home Delivery (HD)

Service Types

XS HD SO E2 PO GR0.00

20.0040.0060.0080.00

100.00120.00

9.56 13.0213.9114.8715.48

96.48

Average Weight by Service Type

Service Type

Average Weight

Standard Deviation

XS 9.56 6.71HD 13.02 13.55SO 13.91 12.66E2 14.87 21.37PO 15.48 18.58GR 96.48 21.15Overall 15.26 20.90

Service Types

Service Type

Current Order Count

% of Total Orders

XS 9 0.05%PO 207 1.15%GR 242 1.34%SO 413 2.29%HD 6,723 37.20%E2 10,478 57.98%

Grand Total 18,072 100.00%

Service Types

XSPOGRSOHDE2

Optimization Plan• Shift orders with higher rates to the alternative DC with lower

rate• Results in significant cost savings• Moves some orders to a closer DC• Results in more efficient distribution model

Optimized Order Count % of Order

13,073 72.34%

4,999 27.66%

18,072 100.00%

CurrentOrigin

DCOrder Count

% of Orders

17339 12,021 66.52%

90808 6,051 33.48%Grand Total 18,072 100.00%

Current Transit vs. Optimized Transit Costs

Current Optimized Savings

Service Rate Sum Average Rate Rate Sum Average

Rate Rate Sum Average Rate

XS $237.76 $26.42 $131.29 $14.59 $106.47

$11.83

GR $8,872.18 $36.66 $7,547.48 $31.19 $1,324.70

$5.47

PO $16,559.32 $80.00 $12,062.5

0 $58.27 $4,496,82 $21.72

SO $28,488.08 $68.98 $19,386.4

0 $46.94 $9,101.68 $22.04

HD $84,314.51 $12.54 $74,105.5

2 $11.02

$10,208.99

$1.52

E2 $292,168.39 $27.88 $260,047.

82 $24.82

$32,120.57

$3.07

Grand Total

$430,640.24 $23.83 $373,281.

01 $20.66

$57,359.23

$3.17

Current vs. Optimized Origin DC17339 DC 90808 DC Grand

TotalService Current Optimized

Difference Current Optimize

dDifferenc

eE2 7,227 7,115 112 3,251 3,363 112 10,478GR 160 232 72 82 10 -72 242HD 4,376 5,353 977 2,347 1,370 -977 6,723PO 84 122 38 123 85 -38 207SO 171 245 74 242 168 -74 413XS 3 6 3 6 3 -3 9

Grand Total 12,021 13,073 1,052 6,051 4,999 -1,052 18,072

Current vs. Optimized Origin DC

E2 GR HD PO SO XS01,0002,0003,0004,0005,0006,0007,0008,000

17339 DC Shipments

Current OptimizedE2 GR HD PO SO XS

0500

1,0001,5002,0002,5003,0003,5004,000

90808 DC Shipments

Current Optimized

Optimized Shipment Counts by Zone and DC

Zone 17339 DC 90808 DC 2 2,313 757 3 2,668 297 4 4,112 991 5 3,768 1,366 6 212 1,588 7 0 0 8 0 0  Total: 13,073 4,999

2 3 4 5 60

1,000

2,000

3,000

4,000

5,000

Optimized Shipment Counts by Zone

17339 DC 90808 DC

Current vs. Optimized Origin DC

CA TX NC TN FL0200400600800

10001200

Current

17339 DC 90808 DCCA TX NC TN FL0

400

800

1200

1600Optimized

17339 DC 90808 DC

Current vs. Optimized Origin DC

17339 DC 90808 DC

Zone Transit Time

Transit Rate Zone Transit

TimeTransit Rate

Current Average 4.21 2.12 $20.85 5.92 3.12 $29.76

Optimized Average 3.76 1.84 $18.48 4.55 2.39 $26.35

Difference 0.45 0.28 $2.37 1.37 0.73 $3.41

Current vs. Optimized Origin DC

00.5

11.5

22.5

3

2.541.99

Average Transit Times

CurrentOptimized

0123456

4.783.98

Average Zones

CurrentOptimized

$19.00 $20.00 $21.00 $22.00 $23.00 $24.00 $25.00

$23.83

$20.66

Average Transit Rates

CurrentOptimized

Current vs. Optimized Origin DC

Initial DC Network Optimization Summary•Changing to the cheaper transit rate moves 1,052 orders from 90808 to 17339•$57,359.23 in transit rate savings•Decreased average transit zone, time, and rate•Increased efficiency in zone shipments

e-Global Fashion

Network Optimization

Optimization Summary

Distribution Locations

Transportation Cost

One Day Order-to-Delivery Count

Current 2 DCs0 Retail Stores

Average: 23.83Sum:

$430,640.24 2,409

Goal 2 DCs + minimal retail locations

35% decreaseSum:

$279,916.163,614

50% Increase

Optimized Network

2 DCs5 Retail

Locations

40.6% decreaseSum:

$255,681.34

9,262384.3%

Increase

Transit Zones and DCs

CurrentOrigin

DCOrder Count

% of Orders

17339 PA 12,021 66.52%90808 CA 6,051 33.48%

Grand Total 18,072 100.00%

• After optimization, orders were shipping out of the two distribution centers as well as five other retail locations

Optimized

Origin Order Count

% of Orders

33304 FL 836 4.63%80640 CO 838 4.64%28214 NC 1,946 10.77%90808 CA 2,693 14.90%75141 TX 2,967 16.42%60525 IL 3,462 19.16%17339 PA 5,330 29.49%

Grand Total 18,072 100.00%

Operation Company Change

OpCo Current Count

% of Current Orders

OptimizedCount

% of Optimized

Orders

Express 11,107 61.46% 6,332 35.04%

Ground 6,965 38.54% 11,740 64.96%

E2 GR HD PO SO XS

10,478

242

6,723

207 413 9

5,706

487

11,253

207 413 6

Current v. Optimized Order Count by Service

Current Optimized

Service Types

Service TypesOptimized

Origin E2 GR HD PO SO XSGran

d Total

33304 16 820 836

80640 547 1 247 11 31 1 838

28214 92 83 1,770 1

1,946

90808 628 35 1,871 50 109

2,693

75141 1,761 42 1,082 34 48

2,967

60525 1,445 127 1,765 42 82 1

3,462

17339 1,233 183 3,698 70 142 4

5,330

Grand Total

5,706 487 11,2

53

207

413 6 18,072

Current

Origin E2 GR HD PO SO XSGran

d Total

17339 7,227 160 4,37

6 84 171 3 12021

90808 3,251 82 2,34

7 123 242 6 6051Grand Total

10,478 242 6,72

3 207 413 9 18,072

Retail Locations•Found through process of trial and error, and team collaboration

•Additional origin locations were consolidated at small cost increasesZip Count

33304 FL

836

80640 CO

838

28214 NC

1,946

75141 TX

2,967

60525 IL

3,462 Total: 10,049

3330

4 FL

8064

0 CO

2821

4 NC

7514

1 TX

6052

5 IL

836 838

1946

29673462

• 33304 – Ft. Lauderdale, FL

• 80640 – Henderson, CO• 28214 – Charlotte, NC• 75141 – Hutchins, TX• 60525 – La Grange, IL• DC 17339 – Lewisberry,

PA• DC 90808 – Long

Beach, CA

Retail Locations

Count of ShipmentsOrigin Order

Count % of Orders

33304 836 4.63%80640 838 4.64%28214 1,946 10.77%90808 2,693 14.90%75141 2,967 16.42%60525 3,462 19.16%17339 5,330 29.49%Grand Total 18,072 100.00%

3330

4 FL

8064

0 CO

2821

4 NC

DC 9080

8 CA

7514

1 TX

6052

5 IL

DC 1733

9 PA

836 838

1,946

2,693 2,967 3,462

5,330

Next Day Order-To-Delivery Cycle• Current orders with next day

delivery (across all services) count at 2,409

• Optimized orders with next day delivery (across all services) count at 9,262• Found by evaluating changed

service types and origin locations

Current Optimized % Change

2,409 9,262 384.3% Increase

Current Optimized

2,409

9,262

Transit Cost Savings• Transit cost found based on

origin location, service, weight, and destination

• Optimized services and increased number of origin locations led to significant cost savings

Current Optimized

Difference

% Change

$430,640.24

$255,681.34

$174,958.90 40.63%

$23.83 $14.15 $9.68 40.62%

Current Optimized

$430,640

.24

$255,681.34

Overall Impact•2 DCs, 5 Retail Locations•More efficient OpCo and service type assignments•384.3% Next Day Order-To-Delivery Cycle Time improvement•Significant increase in customer service quality•Over 51% of total orders were next day

•$174,958.90 in savings•40.6% reduction in transit costs• $255,681.34 in total costs

Conclusion•Thank you for the opportunity to present

•Questions?

Decision Process1. Vlookup to find transit time, transit rate, and zone for each

distribution center and retail location into a single Excel spreadsheet2. Used a MIN(_) function to find the cost of the CHEAPEST rate for

each shipment• Assigned a row identifier to the cheap rates to connect the LOCATION

of the CHEAPEST rate• Used an IF(_) statement to find the TIME for the CHEAPEST rate for

every designated location found prior

3. Compared the CURRENT TIME to the CHEAPEST rate TIME and used IF(_) function to reassign services if there was a faster service available for less cost

4. Reassigned OpCos according to the new service

Decision Process Continued5. Used IF(_) and VLOOKUP functions to find transit rates for the

optimized services across all retail and DC locations6. Used MIN(_) function to find the NEW lowest cost7. Used IF(_) function to find NEW CHEAPEST origin location8. Used IF(_) and VLOOKUP functions to find a new transit rate based on

the NEW origin location9. Used IF(_) and VLOOKUP functions to find a new transit TIME based

on the NEW origin location10. Altered formulas to see the cost/time effects of moving orders from

different origin locations