43%
Projected long-term revenue growth supported by the new supply chain strategy
10%
Estimated reduction in store and supply chain operating costs — unlocking major savings
24 hours
From order to delivery — meeting customer demand for speed and convenience
PwC built an omni-channel supply chain — so the client can grow revenue and deliver faster.
SITUATION
Modernizing to deliver — at scale and at speed
From big ticket items to the smallest purchase, anything can fit in a virtual shopping cart. Our client, a Fortune 500 retailer with more than 2,000 stores, offered customers an online channel, along with a number of delivery options. Still, an aging, store-focused supply chain was not flexible enough to support the company’s growth aspirations. The company wanted to create a true omni-channel environment, but in its current state, the supply chain couldn’t support this transformation. While meeting customers’ expectations — lots of options and lightning speed service — could grow revenues, addressing these demands would also have significant costs and major implications for the workforce. It was time for a new supply chain strategy: a plan for today and, in a world of change and disruption, for tomorrow.
SOLUTION
Unlocking growth with an integrated approach
A big transformation calls for a holistic approach. PwC’s Connected Supply Chain and Integrated Business Planning solutions, which help align business decision making and supply chain processes from end to end, appealed to the company’s Chief Operating Officer. With the goal of assisting from strategy through execution, we brought together leaders from across PwC with deep retail expertise and vast experience in supply chain operations and customer strategy.
We began by assessing the current state, benchmarking and developing a baseline for supply chain performance. What would it take to outperform the competition? Next up, we undertook market research and organized a survey of more than 3,500 consumers. How did customers want to order and receive their purchases, and what fulfillment requirements would be needed to meet these expectations? Then came charting growth over the long term. What product mix would be needed, at what volume, and what were the implications across the supply chain? Bringing it all together, we defined our strategy: to create a differentiated supply chain and segmented distribution center designed to delight customers, support company growth and deliver shareholder value.
Distinct supply chains would enable the company to offer consumers a true omni-channel experience. A dedicated delivery network would streamline and fast-track service and consolidate inventory for better control and management. Additional delivery services, including new direct-to-consumer options, would improve efficiency and service to customers. Finally, a new system for managing returns (reverse logistics) would reduce losses and optimize space.
Creating multiple supply chains would have a significant impact on IT. Working closely with the company’s internal teams, we designed a new IT architecture, detailing the upgrades and enhancements to systems and software that would be needed to support the differentiated supply chain. Finally, front-line employees would be as critical as back-office operations for the new supply chain strategy to be effective. Working closely with the company’s HR staff and leaders, as well as directly with in-store and distribution center employees, our dedicated change management team helped create and execute a strategy to support the transformation, including set-up and staffing of the new buy online/pick-up in-store (BOPIS) desk and back-of-store functions associated with the new system for liquidating product returns. We worked with our client to design apps to help streamline decisions about facility locations and drive short-term value by improving inventory policies.
RESULTS
A smarter supply chain with lasting impact
With its connected supply chain strategy in motion, the company is positioned to drive long-term growth, while delivering a better customer experience. The differentiated supply chain is expected to support a 43% increase in revenue, while operational efficiency improvements could reduce costs by up to 10%, unlocking multi-billion dollar savings.
A clear IT roadmap helps ensure the business can keep pace with evolving tech needs, and the design of a next-generation distribution center supports growth in key product categories. Improved inventory visibility helps the company make faster, more informed decisions. And with next-day delivery, flexible fulfillment and enhanced digital experiences, the retailer is not only meeting rising customer expectations — it’s set up to stay ahead of them.
FUTURE-READY OPERATIONS START HERE
Ready to move faster and operate smarter? See how PwC helps businesses build agile, connected supply chains.
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