Miebach redesigned a fragmented North American distribution network using digital twin modeling and scenario analysis. The recommended network reduces operating costs by a projected $44 million annually, lowers inventory by $62 million, increases Direct Plant Shipments by 5.7%, and creates a scalable operating model supported by a phased implementation roadmap.

Scaling a Complex Distribution Network While Reducing Costs

Rapid growth had outpaced the client's distribution network, leaving it increasingly complex, costly, and difficult to scale. Three inventory tiers - including Plant Distribution Centers (PDCs), Postponement Centers (PPCs), and Regional Distribution Centers (RDCs) - created overlapping product flows, unnecessary handling, and limited flexibility to support future demand.

Beyond reducing operating costs, the client needed a long-term strategy that balanced service performance, inventory positioning, and warehouse capacity while providing a clear roadmap for implementation.

Project Objectives

To support these goals, Miebach was asked to:

→ Establish a baseline of current network performance and costs.
→ Develop a 10-year network strategy aligned with future growth.
→ Evaluate consolidation opportunities across the distribution network.
→ Create a phased implementation roadmap supported by a digital planning capability.

Distribution Network Optimization Through Modeling and Scenario Analysis

Using detailed network modeling and scenario analysis, Miebach evaluated how the distribution network could evolve over the next decade while maintaining service levels and preparing for projected growth.

The study examined multiple future-state scenarios, including distribution center consolidation, changes to postponement operations, warehouse capacity expansion, and inventory positioning strategies. Each alternative was assessed against cost, service, operational complexity, and long-term scalability to identify the optimal network configuration.

Inventory Positioning and Distribution Strategy by Business Unit

Rather than applying a one-size-fits-all approach, Miebach evaluated each business unit's distribution strategy and identified opportunities to bypass postponement centers for product families already relying heavily on Direct Plant Shipments (DPS). This targeted approach reduced unnecessary handling, warehouse overhead, and inventory while maintaining postponement capabilities where they continued to create value.

Working closely with the client throughout the evaluation process, Miebach developed a preferred network strategy supported by a detailed business case, phased implementation roadmap, and digital twin capable of supporting future planning decisions.

The project also delivered a repeatable ETL process and modeling playbook, enabling the client to continuously update and refine the network as business conditions evolve.

Lower Distribution Costs and Improved Supply Chain Performance

The recommended network significantly simplified the client's distribution model while creating measurable financial and operational benefits.

The future-state design reduces the network from a three-tier distribution structure to a more streamlined operating model, supported by targeted warehouse expansions and strategic consolidation of facilities.

The recommendation simplified the distribution, eliminating unnecessary product handling, and streamlining material flows across North America

Key Outcomes

The phased roadmap also prioritized facility investments, warehouse expansions, and inventory transitions to minimize business disruption while maximizing value realization.

Long-Term Supply Chain Planning with a Digital Twin

Beyond the immediate savings, the project established a long-term planning capability that allows the client to continuously optimize its supply chain as market conditions change.

Miebach delivered a calibrated digital twin network model, warehouse sizing methodology, implementation roadmap, and modeling playbook that enable future scenario planning and faster, data-driven decision making.

As a result, the client now has the tools to evaluate growth opportunities, test strategic alternatives, and make informed network investment decisions with greater confidence.