22% Freight cost reduction
Wholesale & DistributionTransportation Management
Distribution Network Consolidation Delivers $1.4M Annual Savings
Operating six regional warehouses with overlapping coverage zones, a building materials wholesaler was duplicating inventory and freight costs. A network rationalisation study identified a 3-warehouse model with better reach.
$1.4M
Annual cost savings
3
Warehouses (down from 6)
98%
Delivery SLA maintained
The Challenge
- Six regional warehouses with overlapping delivery zones resulting in the same postcodes served from two locations.
- Inventory duplicated across sites — $2.1M in redundant stock held as each site managed its own safety stock.
- Rising lease costs across three sites approaching renewal, creating urgency for a network rationalisation decision.
The Solution
- ✓Built a network model using 24 months of order data to simulate delivery SLAs under 2-, 3-, and 4-warehouse scenarios.
- ✓Identified a 3-warehouse configuration covering 98% of existing delivery SLAs with lower total inventory holding.
- ✓Developed a transition plan sequencing site closures to avoid service disruption during the 9-month consolidation.
- ✓Negotiated early lease exits on two sites, recovering 7 months of lease cost to fund the transition.
Key Outcomes
$1.4M
Annual cost savings
3
Warehouses (down from 6)
98%
Delivery SLA maintained
Industry
Wholesale & Distribution
Solution
Transportation Management
Client
Building Materials Wholesaler
Network DesignWholesaleCost Reduction
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