Hot on the heals of shipment generation and split management is optimizing inventory placement. When acquiring inventory, the initial placement (or "first allocation") of inventory can have the biggest impact on outbound shipping costs compared to any other decision in the supply chain. Don't put all the winter coats in the Miami FC, for example.

At earlier stages in the business, placement is straight forward. Very young companies rely on the 3PL to make those decisions. Middle stage companies with one or two FCs either ignore the decision or make it simply by mirroring inventory across both FCs.

As complexity grows through the continual expansion of fulfillment nodes, carriers and methods, and SKU counts, "first allocation" becomes a critical decision.

The solution is yet again rooted in data science. A sophisticated data model will inform which SKUs should be sent to which nodes based on probabilistic forecasting of the location of which customers buying what products.