PROBLEM TO BE SOLVED
The primary objective of the project was to test, through A/B testing, the potential sales increase resulting from a reduced delivery timeframe. To achieve this, a high-demand (curve A) product was stocked in the São Paulo Warehouse, specifically to serve customers in São Paulo.
With this setup, orders from this location would have an estimated delivery time of 1 business day (Category A), whereas the same product shipped directly from the supplier’s factory would have an estimated delivery time of 6 days (Category B) to the same customers. The entire simulation was conducted on the MadeiraMadeira website as well as other marketplaces and it ran for approximately 15 days.
MY ROLE IN THE PROJECT
As the Product Owner for inventory management products at the Warehouse, my role was to provide visibility into the orders with reduced delivery times, and part of the D+1 project, within the WMS for the Planning and Control department, considering that there were other operations such as cross-docking and reverse logistics in the warehouse as well.
Additionally, as a squad lead I played a key role in the in-house implementation at the distribution center, optimizing the entire inbound and outbound process. Since the operation needed to be fully streamlined to ensure a 1-day turnaround for picking, packing and shipping, I worked closely on process improvements.
Moreover, I contributed to inventory security by implementing solutions that triggered new inbound product orders from suppliers as soon as the initial stock levels began to decrease.
RESULTS AND ACHIEVEMENTS
As a result, the hypothesis for A/B Test was confirmed, with a 21% increase in the number of orders as the estimated delivery time (ETA) was reduced to just one business day. This test also led to the expansion the operational processes at the distribution center, introducing a new portfolio of 30 high-demand (Curve A and B) products under the reduced delivery. To accommodate this growth, the distribution center’s space had to be expanded from 12,000 to 37,000 square meters.
- For the project to succeed, it was crucial to invest in new equipment, hire additional staff, establish more secure contractual agreements with logistics partners, and ensure the distribution center operated 24/7.
+ 21%
Sales (number of orders) considering Test AB conducted for 20 days with 5 skus (closets, tables and Kitchen cabinet)
+30 skus
New portfolio of products for the D+1 São Paulo
3x
The warehouse has been expanded to three times its initial size considering the start of the project.
PROJECT GALLERY
Felipe da Rocha 