Distribution Network Design


The Opportunity

Leading retailers continually assess and redesign their distribution network capabilities to meet strategic business requirements. Best in Class retailers use the distribution network as a primary source of value creation to lower costs which are then reinvested to drive incremental sales. Distribution Network design requires a clear understanding of retailer capabilities, operating strategies and business objectives, as well as the capabilities of third party warehousing/transportation suppliers and the clients strategic manufacturers. TPG works collaboratively with the client and their manufacturers to implement applicable best practices.


Retail Operations


What We Do

TPG’s network designers work collaboratively with the retailer, manufacturers and third party suppliers to deliver a re-designed supply network, capability and activation plan. A partial list of our consulting services include:

  • Cost to Serve Modeling: Defines the activity based costs of the existing Distribution network and provides a model to assess the redesigned network’s cost structure and opportunities. The Cost to Serve model enables a client to make strategic decisions for outsourcing, manufacturer collaboration, and provides a basis for operating strategy alignment. Critical areas assessed are inbound / outbound shipment management, distribution center operations, retail receiving operations, freight, and differentiated services.
  • Category Segmentation: Documents and quantifies the behavior and requirements of product categories to identify the impact on distribution design. Categories are then segmented to develop working model of ideal distribution network requirements.
  • Manufacturer & Third Party Assessment: Based on cost to serve modeling and category segmentation, TPG identifies critical manufacturers and third party suppliers which will impact design choices.
  • Network Design: TPG will develop an aligned network design based on transportation and service requirements, outside supplier capability, and cost to serve modeling by applying the appropriate Best Practices. The design is fully quantified and the impact on all client functions identified.
  • Establish Network Design Operational Plans: A Master Plan or Roadmap to deliver the Distribution Center redesign which may be developed after a period of pilot testing new operational capabilities. The roadmap also includes required metrics, inter-intra company planning processes, and role description and competencies as required.

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