Multiple Warehouse to Customer Site Optimization Study in Support of a Company Strategic Customer Service Initiative
Scott Marckini, Rosemont, IL, defended his thesis, “Multiple Warehouse to Customer Site Optimization Study in Support of a Company Strategic Customer Service Initiative,” on May 2. Currently, Marckini is the Director of Dairy Commodities for his company. He’s responsible for all line strategies, analysis, and distribution optimization for the dairy products category. He was a Spring 2019 graduate of the MAB program.
In his thesis, Marckini determined if current company warehouse assets, both owned/operated sites and third-party logistic facilities, can support one-day delivery of orders form priority 1 and priority 2 customers, delivered in 24 hours.
“In the food ingredient distribution space, high levels of service and responsiveness to customer needs is critical to success,” Marckini said in his thesis. “Having the right product available and delivering it faster than the competition dictated success in the highly completive Chicago market.”
Marckini collected data regarding customer gross profit information for 2018, all physical customer ship-to locations, locations of company warehouses, and the distance between locations and the current transportation industry standard for a single day’s delivery transit. For potential cost saving calculations, annual operating costs of each warehouse were identified.
Marckini selected a model that would identify customers’ ship-to addresses that was within a 500-mile constraint of a target company warehouse. The figure of 500 miles was selected as the transportation industry recognizes this as the 1-day transit distance.
His thesis indicated that all priority 1 and 2 customers ship-to locations were within one day’s delivery transit. Additionally, the results provided insight as to redundancies that may allow for warehouse closures or realignments and cost savings to the company. Alternatively, he demonstrated how these redundancies be used by sales and marketing as a strength in the sales process providing the company a competitive advantage.
Dr. Jason Bergtold, Professor of Agricultural Economics, and Marckini’s thesis advisor, said, “Scott did an excellent job of developing a real-life problem to optimize different aspects of his company’s warehouse system, taking into account customer relations. His research is a great example of how thesis research in our Master of Agribusiness program can have real on-the-ground impact and make a positive contribution for their company.”
The full thesis publication can be found online on Kansas State University’s Research Exchange at http://hdl.handle.net/2097/39756.