Business Analytics for Streamlined Assort-Packing and Distribution of Fashion Goods at Kolon Sport

Abstract

Kolon Sport (K/S), a leading outdoor fashion brand in South Korea, must deal with a large variety of items during each selling season. In doing so, the company has encountered a challenging operational problem—the assort-packing and distribution problem. The problem involves making decisions on the optimal method to use in packing a set of different items in a box and allocating the boxes to stores to meet the stores’ demands. In this paper, we introduce an analytics project initiated to improve the assort-packing and distribution process, and we describe the formulation and solution approach we developed to solve this industrial problem in a timely manner. We validated the proposed approach by computational and onsite pilot testing, which demonstrated that the decisions made using this approach are superior to those made with the manual method K/S used previously. Inventory is distributed to all stores in a more balanced way by considering the demands of the stores. K/S, which implemented the proposed approach into its internal system in July 2015, estimates that the new system improves sales by approximately eight percent.