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Published on
July 21, 2026
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The company's off-price retail division had an ambitious target: open more than 30 new stores per year, nearly doubling its total store count by fiscal year 2030. For the supply chain team, that created an immediate question — could the existing network support that growth? When the company's supply chain team modeled it, the answer was no. Current DC-to-store ship lanes would hit capacity and become suboptimal as early as FY26. In the aggressive scenario — 50 stores per year — the network wouldn't be able to service all planned openings at all. The cost of inaction: $10M in sub-optimal expense by FY30.
The company's current supply chain network at the time consisted of six distribution centers, three fulfillment centers, and one centralized sort center.
What made the problem harder was uncertainty. The retailer's strategy team could commit to a pace of growth but not to precise store locations. Any network solution had to be flexible — modular enough to absorb growth where needed. Expanding existing distribution centers wasn't the answer: space constraints, inflexibility, and the difficulty of scaling down ruled it out. The team needed a different kind of infrastructure.
The company decided on sort centers — 3PL-operated facilities that can be positioned closer to store clusters, scaled up or down as growth shifts, and stood up without the capital commitment of a DC expansion. The analysis that got them there ran through two Cosmic Frog models, operated by two teams working in sequence.
The network strategy team used Optilogic's brownfield analysis model to evaluate nine candidate locations — quickly narrowing the field to the highest-value opportunities and building the business case for leadership. "I think it's really powerful to be able to run scenarios relatively quickly," the Strategy and Planning Program Manager noted. From there, the company's Transportation Specialist took the shortlisted locations into Hopper, the company's transportation routing model built in Cosmic Frog, to validate route feasibility and ensure proposed store groupings worked operationally — keeping the analysis grounded in reality before anything went to sourcing.
The handoff from strategic analysis to operational validation was by design — and it extended into carrier negotiations. As the sourcing team went to market for 3PL contracts, the Transportation Specialist ran incoming carrier bids through Hopper in real time.
"I could get it to the sourcing team within an hour to go back into negotiations. It gave us more cards to play."— Transportation Specialist
The company is opening two sort centers in 2026, in the Southwest and Northeast regions — the highest-value locations from the analysis.
The Southwest site absorbs stores that had been straining a Southern California DC and delivers $2.9M in projected annual transportation savings.
The Northeast site relieves a Northeast DC and delivers $2.3M in savings — chosen in part because it extends service reach to underserved regional markets that sit well beyond the existing Northeast sort infrastructure.
Together, the two facilities reduce DC-to-store mileage, improve on-time performance, and create the headroom the network needs to keep absorbing new stores. Carrier selection was informed entirely by the modeling — with Hopper providing side-by-side bid comparisons that let the team negotiate with precision rather than estimate.
Looking ahead, the same modeling capability will drive the next wave of sort center decisions: sizing for different market densities, sequencing openings as growth materializes, and scaling the network to meet a store count that may double again by the decade's end.
The company's off-price retail division had an ambitious target: open more than 30 new stores per year, nearly doubling its total store count by fiscal year 2030. For the supply chain team, that created an immediate question — could the existing network support that growth? When the company's supply chain team modeled it, the answer was no. Current DC-to-store ship lanes would hit capacity and become suboptimal as early as FY26. In the aggressive scenario — 50 stores per year — the network wouldn't be able to service all planned openings at all. The cost of inaction: $10M in sub-optimal expense by FY30.
The company's current supply chain network at the time consisted of six distribution centers, three fulfillment centers, and one centralized sort center.
What made the problem harder was uncertainty. The retailer's strategy team could commit to a pace of growth but not to precise store locations. Any network solution had to be flexible — modular enough to absorb growth where needed. Expanding existing distribution centers wasn't the answer: space constraints, inflexibility, and the difficulty of scaling down ruled it out. The team needed a different kind of infrastructure.
The company decided on sort centers — 3PL-operated facilities that can be positioned closer to store clusters, scaled up or down as growth shifts, and stood up without the capital commitment of a DC expansion. The analysis that got them there ran through two Cosmic Frog models, operated by two teams working in sequence.
The network strategy team used Optilogic's brownfield analysis model to evaluate nine candidate locations — quickly narrowing the field to the highest-value opportunities and building the business case for leadership. "I think it's really powerful to be able to run scenarios relatively quickly," the Strategy and Planning Program Manager noted. From there, the company's Transportation Specialist took the shortlisted locations into Hopper, the company's transportation routing model built in Cosmic Frog, to validate route feasibility and ensure proposed store groupings worked operationally — keeping the analysis grounded in reality before anything went to sourcing.
The handoff from strategic analysis to operational validation was by design — and it extended into carrier negotiations. As the sourcing team went to market for 3PL contracts, the Transportation Specialist ran incoming carrier bids through Hopper in real time.
"I could get it to the sourcing team within an hour to go back into negotiations. It gave us more cards to play."— Transportation Specialist
The company is opening two sort centers in 2026, in the Southwest and Northeast regions — the highest-value locations from the analysis.
The Southwest site absorbs stores that had been straining a Southern California DC and delivers $2.9M in projected annual transportation savings.
The Northeast site relieves a Northeast DC and delivers $2.3M in savings — chosen in part because it extends service reach to underserved regional markets that sit well beyond the existing Northeast sort infrastructure.
Together, the two facilities reduce DC-to-store mileage, improve on-time performance, and create the headroom the network needs to keep absorbing new stores. Carrier selection was informed entirely by the modeling — with Hopper providing side-by-side bid comparisons that let the team negotiate with precision rather than estimate.
Looking ahead, the same modeling capability will drive the next wave of sort center decisions: sizing for different market densities, sequencing openings as growth materializes, and scaling the network to meet a store count that may double again by the decade's end.
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