A Track Record of Resilience and Scale

Case Studies

See the case studies below for a sampling of some of our successful client engagements.

Project Name: Last Mile Now
Client: Large online automotive dealership
Project Commencement Date: April 2020
Project Completion Date: June 2020

In the early days of the coronavirus pandemic, consumer attitudes about vehicle delivery changed rapidly: customers wanted a clean and disinfected car, delivered touch-free and on-time. The client was setup to deliver only about 4% of sold vehicles with their small flatbed fleet in two markets and struggled to meet any of these new customer demands in most markets. Watching larger rival—whose nationwide fleet of delivery flatbeds enabled their company to quickly pivot to meet customer demands—triple its share price from a March bottom brought anxiety to the client’s executive team about the ability for their growing startup to compete in this new paradigm. The high-growth online automotive client urgently needed a plan to meet customer expectations about vehicle delivery or their business model, brand, and looming IPO would suffer immense setbacks.

The Challenge

Client’s executive leadership sought a solution to a number of time-sensitive concurrent problems:

  • Provide a niche last-mile vehicle delivery service
  • Provide that service in stressful and turbulent market conditions
  • Limit long-term capital expenses
  • Serve as many customers as possible with this improved delivery model

Project Name: North Jersey Inbound Turnaround
Client: Large eCommerce retailer
Project Commencement Date: June 2017
Project Completion Date: December 2017

Client’s fulfillment center network was growing across the United States rapidly, but no region came close to the volume and footprint of the northeast region’s operations, particularly in the NYC metro area. A 1.0M ft2 fulfillment center in northern New Jersey had a new GM who had just completed his 8-week on-boarding. He was a talented warehousing professional with many years of experience in other companies.

The site he would soon lead had struggled in its short 2-year life. The previous GM and senior leadership were recently terminated as a result of the troubled launch and ongoing operational inefficiencies. The new site leader knew he had a lot to fix and impatient corporate leadership assessing his site’s daily performance. They would not give him a long honeymoon period before demanding results. There would certainly be no mercy leading into the 2017’s summer shopping event and holiday season, both forecasted to be record breakers.

The Challenge

The site’s GM and much of his senior leadership was new to the building and some were new to the company. The site had a massive robotic shelving system on its first floor, the largest in the country, but, compared to its peers in the northeast, the site featured an undersized truck yard, an awkwardly laid out receiving dock, and an unusual very-narrow aisle (VNA) racking setup that all combined created volatile flow in inbound. The site was a critical one for the company, its most proximate conveyable-item fulfillment center to New York City.

Project Name: A Model for Recycling Improvement
Client: International Bottling Company Affiliate in South Africa
Project Commencement Date: March 2020
Project Completion Date: May 2020

In 2018, an international bottling company with operations in South Africa faced a recycling challenge: the parent company’s global initiative aimed to be a zero-waste company by 2030.  Due to the unique grey-market of recycling collections in South Africa, the affiliate company faced some headwinds to increasing recycling rates for their used bottling materials.  A new regulatory environment of Extended Producer Responsibility (EPR) would change the dynamics of how manufacturers managed their waste products.

The Challenge

The bottling affiliate had a corporate objective to satisfy, but limited ability to influence or control consumer behavior or the behavior of the recycling pickers.  They also had a regulatory obligation in the form of South Africa’s EPR policy, which makes manufacturers responsible for managing the full lifecycle of their products including the waste.  While similar regulation had been tried to mixed results in other countries, the change would penalize bottlers whose waste management solutions did not meet the expectations of South Africa’s enforcement agencies.

Worth noting is how recycling materials are collected in South Africa.  In many parts of the developed world, waste, including separate recyclable materials, is handled by the municipality or the business.  In South Africa, “waste pickers” work as independent materials reclaimers.  They seek out materials throughout the day from waste bins, collect them in their personal trolley and walk the materials to a recycling facility at the end of their work day to exchange materials for payment.  This is labor intensive, unregulated, and exclusively a commoditized business.

The bottler had to solve the economic incentive problem from a corporate and regulatory standpoint as well and appropriately meet the needs of the pickers, upon whom they were reliant for waste collections.  Converting their supply chain to exclusively aluminum was not practical or feasible, they needed some guidance to meet their corporate and regulatory objectives.

The Strategy

Market rates for recycling created a clear economic incentive for collection of some materials but not others.  Aluminum, for example, had a high recycling rate because of its attractive street value.  On the grey-market, pickers strongly preferred aluminum over other materials, but the bottler’s primary materials were glass and cardboard.  Because pickers physically move their own carts to the collection facility, weight of their day’s haul mattered.  As expected, these hard working collectors would rather pick 160 kg—roughly the maximum haul weight—of aluminum than 160 kg of any other material.

At its core, the bottling company simply required a way to increase collections of glass and cardboard but also had to understand the cost implications of this.  They ultimately had a choice on where they could incur costs: as a subsidy to encourage picking specific materials or paying fines to the South African government for EPR non-compliance.  Given the bottler’s reliance on the grey-market labor, it made more sense to leverage the needs of that labor market rather than paying fines.  We also saw this aligned with the company’s corporate vision such that such a plan would be the first of its kind in South Africa, recognizing the reality of the grey-market and offering a notable economic improvement to its participants.

We utilized a optimization tool within Excel called “Solver” to generate sensitivity models for the client based on a material’s street value, budget for EPR subsidy, and availability of materials.  We provided the client with two options:

  • maximize a recycling rate given a willingness to spend on subsidy
  • set a target recycling rate given an unconstrained willingness to spend on subsidy

The model gave the client quantifiable financial expectations around the recycling initiative’s characteristics within South Africa, but also a framework of how to structure a broader sponsorship/goodwill effort of the nation’s waste collections.

Above: model output indicating that the bottler could see a 95% collections rate with a R256.28 ($16 USD) per kilogram of material collected.

The Strategy

An assessment of the associates, shift leaders, and flow design led us to identify several opportunities that could generate immediate improvements:

  • Streamline receive function: The team used an “each receive” function by which every received item was counted and manually received into the system. Benchmark sites had access to a conveyance system that automatically received units based on weight and advance shipment notification match. While this site did not have space for that conveyance system, the company’s supply chain software team to duplicate the logic and make it accessible via hand scanners for the receive team. This resulted in an 8X improvement in throughput from 300 units max to 2400 units max per hour.
  • Optimize VNA racking: The VNA space had a confusing zoning system that led to frequent overstaffing. After a reorganization of the space, we also began a consolidation program to ensure the space was at or near its cubic capacity and all bins were fully occupied. This put the VNA space at close to 100% utilization all the times an increased the pick efficiency by 20% for the previously underutilized order pickers.
  • Receive without breaking bulk: Combined with the above points, receiving and stowing units as pallets was highly efficient but done minimally at this site. We added many pallet zones in underutilized spaces in the receiving area of the building. Part of the addition was the new idea of “mega-bins”, which allowed for multiple pallets of the same SKU to be stowed in the same consolidated space. This became a critical part of the improvement strategy, because it enabled bulky items to be stowed in high quantities in the same space, therefore minimizing the manual stow burden but also allowed multiple pickers to work at the same time in the same bin location. Receipt of pallets was approximately 4,000 units per hour, over 10X the rate of the each-receive function.

These 3 operational improvements required $0 in capital expense and, combined with additional improvements to forecasting and shift-planning strategies, led to an 83% improvement in inbound throughput per hour efficiency. The site was also the only site nationwide that did not require inbound team overtime throughout the holiday season, a sustained variable cost avoidance of roughly $1.5M. The site became a benchmark site following the turnaround and led the nation in several performance metrics for the season and next year.

The Strategy

With the lead time for truck procurement and upfitting extended by several months due to business shutdowns as well as the time and long-term capital expense constraints, we advised finding a capable and equally eager delivery service provider whose business model included last-mile delivery and who had a footprint in all of the client’s key market areas. This enabled mutually beneficial negotiations that built a strong business relationship. Common topics included reasonable delivery ranges, setting performance expectations, forecasting volumes, customer communication strategy, automating order management, and driver selection/training. Important, but largely absent was transactional bickering over service cost.

What impressed the client most was the vendor’s willingness to provide a flat rate across all markets in the interest of speed and simplicity, even when that meant some operating markets would lose money. The client recognized the need for strong, stable partners who could grow in tandem; similarly, the vendor recognized their long-term opportunity to be that partner.

The last mile deployment plan went live in 60 days from inception. The new hub-and-spoke model launched in 12 markets and accounted for 75% of the client’s deliveries, up from 4% of deliveries, and included options to expand to more markets.

The order management cycle was fully automated via API, a first of its kind in the company’s history. Delivery times became much more predictable with the development of scheduled departures from the client’s highest volume facilities to the vendor’s in-market delivery stations. The added vehicle handling step at the delivery stations allowed for long-transit vehicles to receive a final cleaning and revealed some previously unknown quality issues that could now be addressed before the vehicle was delivered.

The client had a successful IPO within days of the last-mile program launch and saw it’s valuation climb as high as $6B.