A national tire distributor wanted to optimize its distribution network in order to reduce costs and improve service.
Company
  • The company has emerged as the nation’s premier tire distributor through decades of acquisitions and steady growth.
  • The company has 10 million square feet in more than 125 U.S. and Canadian distribution centers (DCs) and regional branches, as well as more than 40,000 stock-keeping units (SKUs).
Challenge
  • Maintained an extensive distribution network in a highly competitive industry
  • Offered a large, diverse product line with a wide range in volume and demand variability
  • Wanted to reduce costs and improve service in a market that is sensitive to time and cost
Tompkins International's Role
  • Determined the most cost-effective network model, including locations, service areas, and facility missions for non-market driven locations.
  • Based the recommended network on a cost and time optimized model for all DC, branch, long-haul transportation, and local delivery operations, as well as planned market expansion.
  • Assessed demand planning, forecasting, and inventory management policies to maximize availability and improve order fill rates while ensuring inventory working capital was minimized.
  • Improved and expanded the existing performance management/continuous improvement program.
The Results
  • A consolidated DC level network and inventory optimization was developed to reduce the total distribution operation and inventory holding costs while maintaining same-day and next-day customer delivery service levels.
  • DC and branch level inventory policies were created to optimize working capital and incremental gross margin.
  • Branch level network and inventory optimization was performed to maximize profit through inventory deployment.
About the Author
Tompkins International Staff
Tompkins International Staff