Last mile logistics in Fast Fashion supply chains: a case study

Abstract

In the fast fashion industry, high delivery frequencies and low lead times are key factors of market competitiveness. To this goal, many companies are evaluating the possibility of opening urban satellites close to retail stores. Urban satellites can assure a number of daily replenishments larger than one at the retail stores. However, opening urban satellites requires expensive capital expenditures and can increase transportation costs. In this paper, we investigate the impact of urban satellites on the service level, inventory and transportation costs of fast fashion supply chains. Discrete event simulation is used to assess the value that urban satellites can provide to fast fashion supply chains. The application to an Italian retailer case study reveals that the increased transportation and storage costs may be compensated by increased sales as a result of a wider product assortment at the retail stores. The case study simulation results are proposed as possible lessons for other fast fashion last mile distribution systems.