This power tool manufacturer needed to analyze its existing distribution network in order to lower costs and improve service levels to dealers.

Company

The company is a manufacturer of chainsaws, edgers, leaf blowers, circular cut saws, trimmers, and other powered tools and accessories. It markets its products through six distribution centers (DCs) along with six independent distributors. Its tools are sold by 8,000 retailers throughout the U.S. and exported to more than 70 countries.

Challenge

Tompkins International analyzed the company’s existing distribution network. The objectives were to determine the number and size of distribution points and develop an inventory deployment strategy by facility in order to lower total distribution costs and retain or improve service levels to their dealers. Other objectives were to estimate the total one time expense and capital requirements for the transition to the recommended network and estimate the amount of required storage and handling equipment for the next 5 to 10 years.

Tompkins International's Role

Tompkins developed a long-range strategic plan for the company’s distribution operations in the U.S. The following steps were taken to develop the plan:

  • Visited existing sites to assess present operations, storage, and throughput capacities of each DC.
  • Developed and validated a customized software model to simulate freight cost for existing sites and determine the impact on inventory levels.
  • Generated alternatives based on business, geographic and demographic criteria.
  • Performed economic analyses of the alternatives, including the overall network capital and transition costs to determine the recommended path forward and ensure the financial stability of long-term investments.
  • Developed implementation plan and facility-specific recommendations.
The Results

Tompkins’ plan recommended that the company consolidate the storage and distribution of slow-moving stock-keeping units (SKUs) into another facility, expand a northwest facility, and relocate inventory among other branches. Additional recommendations focused on inventory realignments, storage and picking methods, and facility layout.

About the Author
Tompkins International Staff
Tompkins International Staff