O'Kay reduced the delivery arm with a digital double without increasing costs

2021: Creating a Digital Logistics Double

In just three months, GK Korus Consulting"" created digital double logistic infrastructures O'KAY Trading Network and developed retailer a competitive logistics development program until 2023. Simulation results showed the potential to reduce costs in current supply chains and reduce the weighted average delivery arm of products from RCs to stores by more than 30%. This was announced by Korus Consulting on January 19, 2022.

To support the stable work of logistics and implement plans for the development of the network, O'KAY management decided to develop a strategy for optimizing the supply chain, taking into account business priorities and tasks. Among them are a high level of service, a reduction in the shoulder of product delivery to stores and general logistics costs. The company needed to get specific recommendations on how to develop supply chains on the horizon of several years. To do this, the retailer decided to use mathematical modeling methods.

KORUS Consulting specialists conducted interviews with business experts of key divisions of O'KAY, collected an array of data, prerequisites and restrictions, and designed the business architecture of the network. On historical data, experts created a mathematical double, and then adjusted the logic of the chains. The developed models of the retail chain supply chains formed the basis for future optimization solutions and the development of a strategy for this direction.

We developed recommendations for optimizing logistics "O'KAY" in just three months - all this using mathematical modeling methods. Thanks to the project, the retailer appreciated the development potential and possible savings. For example, the simulation results showed the potential to reduce costs in current supply chains and increase service levels by reducing the weighted average delivery arm of products from distribution centers to stores by more than 30%, "said Dmitry Krasilov, head of Supply Chain Design at KORUS Consulting Group of Companies.

The drivers for building a digital model of the supply chains of the O'KAY network were the ever-increasing cost of the delivery arm to distant regions and the insufficient speed of reaction to changes in demand in stores. To implement the task, we chose the company "KORUS Consulting." As a result, we achieved a significant reduction in the shoulder of delivery to stores without increasing the logistics budget. As a result, we have benefited significantly in terms of the cost of transportation services, which overlaps the cost of additional operations at the distribution center, including its rental. The result allowed us to form a strategy for the development of logistics until 2023, "said Igor Shatsky, director of logistics at the O'KAY network.