Locational Modeling—Following Wal-Mart’s Lead

Moberly, MO (population 11,945) is 30 miles to the nearest interstate and 150 miles to a major airport, which would have put it out of consideration for many “big-city centric” logistical decision makers. But, as our studies of Wal-Mart’s 109 DCs have shown, not only can you operate out of smaller cities but you can build the biggest company in the world from them. The data on the location of their DCs and the example that Wal-Mart is setting in the logistical industry is starting to have an impact, as evidenced by Goodyear.

Goodyear’s decision to locate their industrial and automotive belts and hoses inventory in Moberly followed a “gravity analysis” of its seven US manufacturing plants and thousands of customers against its inbound and outbound freight matrix. Not only did Moberly offer a much more economical location for the 286,000 sf facility, but Goodyear cut one day off of delivery time to 40% of its customers. The rural workforce was also able to reduce order-to-ship time to 24 hours for most shipments from 48 hours at their previous larger city location.