The Stream by River Logic

Shoes of Prey Presents Prescriptive Analytics at Retail Supply Chain Summit

February 24, 2017 | By Shannon Kearns

At this year's Annual Online Retail Supply Chain Summit, held in Melbourne, Australia, River Logic's customer Shoes of Prey gave a keynote entitled "Overcoming key supply chain challenges to meet customer fulfillment." Presented by Chris McCallum, Chief Operating Officer at Shoes of Prey, the keynote focused on three topics:

  1. How a retailer has used fulfillment to beat the competition
  2. How it went about creating a point of difference via fulfillment
  3. Meeting customized demands

Shoes of Prey faces some unique problems in the retail industry, due to the fact that they manufacture customizable shoes but maintain a focus on the things that are most important to their customers: lower prices, faster shipping, more customization options and improved comfort. In short, they're not willing to sacrifice an outstanding customer experience in order to lower costs. For example, one of their objectives is to deliver customized shoes to its customers in the same amount of time as other retail providers that don't offer custom designs. During his presentation, Chris dove into the details of how they plan to achieve these goals, despite the many unique challenges they face as a retailer of custom designs.

Optimizing an End-to-End Supply Chain for Profit

One area of particular interest is their use of prescriptive analytics to optimize for profit across their end-to-end supply chain.  

shoes_of_prey_prescriptive_analytics.png

Understanding prescriptive anlaytics

By leveraging River Logic's Planning and Prescriptive Analytics Platform, Shoes of Prey outlined a 4-step plan to achieve this goal. River Logic gave them the unique ability to represent their financial information, their end-to-end physical production process (including things like real process and equipment uptime and throughputs) and unlimited shipping providers, rates, etc. In addition to also offering optimization, River Logic enables Shoes of Prey to see how every decision impacted other areas of their supply chain. 

Solidifying Financial Structure

Stage 1 is already complete, and consisted of accurately compiling the appropriate financial information into their end-to-end supply chain model. Within their financial model, they were able to represent

  • Multiple entities
  • Multiple currencies
  • Transfer pricing
  • Consolidations and eliminations
  • Full P&L, Balance Sheet, and Cash Flow by entity and sales
    channel

Production Optimization 

Stage 2 is also already complete, and it involved optimizing physical production. By representing real process and equipment uptime and throughputs in River Logic, Shoes of Prey was able to understand things like:

  • When to bring on which labor and equipment
  • Optimal CAPEX investment mix and timing
  • Which components or processes to outsource
  • And conduct value bottleneck analysis

Product Price Optimization

Stages 3, Product price optimization, is currently underway. Using River Logic, they'll be able to consider step changes in semi-fixed costs like labor and equipment, regional pricing, delivery costs, and duty/VAT, etc. With that information, they'll be able to:

  • Determine optimal product category mix
  • See volume change break-even for various prices
  • Conduct pricing scenario analysis

Delivery Optimization

The final stage of their end-to-end supply chain optimization is focused on optimizing delivery. Within River Logic, Shoes of Prey is able to represent an unlimited number of providers, weight and region rates, package consolidation and achievement of tiered volume discount rates across multiple shipping providers. With this information, they'll be able to determine the optimal allocation of packages to shipping providers.

Looking Ahead

Beyond the four-step plan outlined above, Shoes of Prey will look to use River Logic to prescribe answers to questions like:

  1. Which price/delivery date combination to offer customers
  2. Which order to produce when
  3. Which production to line to use per order
  4. Which shipping provider to use per order
  5. Which shipping product (time/cost) to use per order

Access the full slide deck presentation here.

 

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