Background

Notino, Europe’s leading online beauty retailer, expanded its operations by opening a third warehouse in Italy. This expansion necessitated a strategic decision: determining which suppliers should deliver directly to the new Italian warehouse and which should continue supplying through the central warehouse in the Czech Republic for subsequent internal distribution.

The Challenge

The main obstacles in making this decision were:

1. Lack of supplier location data in internal systems
2. Need for a data-driven approach to optimize the supply chain efficiently

My Innovative Approach

1. Leveraging VAT ID Data:
   • Recognized that VAT ID could be used to locate suppliers accurately
   • Utilized the VIES (VAT Information Exchange System) service to match VAT IDs with company addresses
2. Geospatial Analysis:
   • Integrated Google Maps API to calculate road distances from each supplier to both warehouses
3. Data Visualization:
   • Processed and visualized the results using PowerBI for clear decision-making
4. Cross-functional Collaboration:
   • Worked with the purchasing team to implement the findings

Implementation Process

1. Data Collection:
   • Gathered VAT IDs of all Notino suppliers
   • Used VIES service to obtain official company addresses
2. Distance Calculation:
   • Implemented a script using Google Maps API to compute road distances from each supplier to: a) The central warehouse in the Czech Republic b) The new warehouse in Italy
3. Analysis and Visualization:
   • Imported the data into PowerBI
   • Created interactive dashboards showing:
     • Supplier locations on a map
     • Distance comparisons to both warehouses
     • Potential cost savings for different routing options
4. Recommendation Formation:
   • Established criteria for direct delivery to the Italian warehouse based on:
     • Distance differentials
     • Order volumes
     • Product categories
5. Action Plan:
   • Presented findings to management
   • Collaborated with the purchasing team to create a list of suppliers for direct Italian warehouse delivery

Results and Impact

1. Optimized Supply Chain:
   • Significantly reduced transportation costs and times for many suppliers
2. Improved Inventory Management:
   • More efficient stock distribution between warehouses
3. Enhanced Decision Making:
   • Provided a data-driven basis for supplier routing decisions
4. Scalability:
   • Created a replicable process for future warehouse expansions
5. Cost Savings:
   • Estimated annual savings in logistics costs (specific amount would depend on implementation scale)
6. Environmental Impact:
   • Reduced overall transportation distances, leading to lower carbon emissions

Key Learnings

1. Innovative Data Usage: Unconventional data sources (like VAT IDs) can provide valuable insights.
2. API Integration: Leveraging external APIs (VIES, Google Maps) can significantly enhance internal data capabilities.
3. Visualization Power: Complex data becomes actionable when properly visualized (using tools like PowerBI).
4. Cross-functional Impact: Data analysis can drive decisions across multiple departments (logistics, purchasing, finance).
5. Continuous Improvement: Supply chain optimization is an ongoing process that benefits from regular data-driven reviews.