An international home audio and electronics company evaluated its long-term distribution strategy as continued growth, increasing transportation costs, and an upcoming lease expiration created pressure on its existing operating model. The company assembles and distributes imported products from its single Southern California distribution center while also operating a secondary facility on the west coast to support custom product solutions and growing customer demand. Leadership needed to determine whether a single distribution center vs. dual facility strategy, or expanded regional network would best support future growth, cost management, customer experience and operational resiliency.
Stream’s Manufacturing, Food & Beverage, and Distribution team led a comprehensive supply chain, transportation, and labor analysis to evaluate multiple distribution scenarios across the US. The study incorporated inbound container flows from Asia, outbound shipping profiles, customer demand patterns, drayage costs, labor availability, inventory tax exposure, wage pressure, long-term business interruption risk and real estate availability and cost. Stream developed transportation centroid models and regional scenario comparisons to evaluate operational performance, scalability, and total landed cost across various market options. The analysis also identified supply chain resiliency concerns tied to a single port concentration and associated possible disruptions (Single DC location) vs. gained resiliency with a dual facility model and multiple port options. The analysis helped the client better understand long term tangible and intangible operational risk.
Rather than recommending a single predetermined solution, Stream provided an objective data backed framework that allowed the client to evaluate phased growth strategies and future facility options. The analysis informed multiple real estate and operational decisions, providing the company with greater flexibility to scale its distribution network while supporting long term business continuity and cost efficiency.
