Supply Chain Optimisation Example: Inside SleepyHug’s Operational Engine for D2C Scale

If you’ve ever ordered a large product online, like a mattress, you know the worry: late deliveries, damaged goods, or returns that take forever. For D2C brands, these issues don’t just frustrate customers; they can stall growth.

A recent McKinsey report found that companies investing in supply chain optimisation can actually help with this problem by reducing costs up to 20% while increasing customer satisfaction significantly.

SleepyHug, an emerging brand in the D2C market in India, had strong demand and a great product. However, operational roadblocks such as delays, stockouts, and rising return costs were holding them back from scaling.

GrowthJockey - a full stack venture builder, partnered with them to turn the supply chain from a bottleneck into a growth driver.

In this case study, we’ll unpack the challenges SleepyHug faced and how we applied the optimisation of supply chain strategies to build a scalable, customer-first operational engine.

Why is Supply Chain Optimisation so important?

Before we jump into how we helped SleepyHug, let’s zoom out. Why should founders and operators even care about supply chain optimisation, and what kind of impact can it have on your business?

Think of it this way: supply chain optimisation is simply making sure products move smoothly from your factory floor to your customer’s doorstep. It makes sure there’s the least friction and the most reliability.

It’s what keeps deliveries on time, cash flow healthy, and customers coming back. For D2C brands, especially in India, it can be the single biggest factor that decides whether growth feels like momentum or constant firefighting.

As you’ll see throughout this case study, every turning point in SleepyHug’s D2C journey came down to operational choices.

Here’s how it helps:

• Faster fulfilment builds trust: When products consistently arrive on time, customers not only come back but also recommend your brand. Late or unreliable deliveries, on the other hand, tank reviews and hurt long-term retention.

• Healthier cash flow: Smart optimisation of supply chain means less money tied up in excess inventory and fewer delays in clearing invoices. This frees up capital you can reinvest into marketing, R&D, or scaling.

• Fewer stockouts and cancellations: Forecasting demand accurately in your business ensures products are available when customers want them. Every stockout is a lost sale and a hit to your reputation.

• Returns that don’t bleed margins: Reverse logistics is usually messy and expensive. Building structured flows cuts costs, shortens refund timelines, and turns a pain point into a loyalty driver.

• Lower operational costs: With the right supply chain network optimisation, you reduce freight expenses, balance warehouse placement, and make each shipment more cost-efficient.

• Growth that scales with marketing: A strong backend means your D2C marketing strategy can run full speed without worrying about whether stock and logistics can keep up.

The Challenge: Why SleepyHug needed supply chain optimisation

Before starting the D2C journey, SleepyHug had a product customers loved but operations that couldn’t keep up with demand.

When we audited the business, it became clear that inefficiencies in logistics, planning, and visibility were slowing growth. These were structural issues that made scaling in the D2C market in India both risky and expensive.

Here’s exactly what we uncovered.

3PL breakdowns damaged experience and margins

Depending fully on third-party logistics meant shipments often arrived late or in poor condition. For mattresses, that’s brutal - every failed delivery ties up inventory in transit and doubles logistics costs to manage returns.

Without supply chain optimisation, the business was bleeding both customer trust and profitability.

Stockouts turned demand into lost sales

Festive seasons should have been growth moments, but weak forecasting left warehouses short of popular SKUs. Shoppers clicked “buy,” only to face delays or cancellations.

Those stockouts not only killed revenue, they also pushed SleepyHug lower in marketplace rankings. The fix demanded better planning and optimisation of supply chain decisions driven by data and not just by guesswork.

Fragmented systems made the team reactive

Orders were tracked in one place, inventory in another, and finances in spreadsheets. With no unified dashboard, the team only realised a product was out of stock once customers started complaining.

Instead of predicting issues and fixing them in advance, they were stuck firefighting. This lack of visibility made real supply chain network optimisation impossible.

Returns quietly eroded growth

Mattresses have higher return rates than most products, but there was no standard process for pickups, warranty checks, or refurbishing. Each return dragged out, frustrating customers and eating into already thin margins.

Unless reverse flows were built into the plan, no amount of forward supply chain optimisation would be enough to scale profitably.

Collectively, these issues explained the gap between demand signals and delivered outcomes. They also made the case for full-stack supply chain optimisation grounded in technology, process, and control.

Our approach to supply chain optimisation

Once the problems were clear, we knew exactly where to start: measure, regain control, then scale with intelligence. We broke the work down into phases, each designed to solve a specific weakness and stack up towards long-term scale.

Let’s take a look at them:

1. Manufacturing and inventory depth: Secure a strong partnership with an experienced manufacturer to ensure scalable production and reliable stock availability.

2. Warehousing redesign: Set up regional hubs to balance speed, reach, and efficiency in the D2C market in India.

3. Taking back control from 3PLs: Decide which flows to insource so SleepyHug could own service levels instead of depending entirely on third parties.

4. Tech stack integration: Plan for OMS, WMS, and ERP to talk to each other, creating one source of truth for smarter decisions.

5. Marketplace-driven stock planning: Align supply with real marketplace demand patterns from Amazon and Flipkart, not just forecasts on paper.

6. Intelligence through Intellsys: Use forecasting, SKU-level placement, and predictive analytics to foretell demand and cut errors before they even happen.

7. Reverse logistics design: Treat returns and warranties as part of the system, not an afterthought, to protect both margins and customer trust.

This gave us the scaffolding to execute fast, prove wins, and compound gains across SleepyHug’s journey by following a proper supply chain framework for a successful D2C brand.

Solutions: How we executed supply chain optimisation end-to-end

A clear approach only matters if it translates into execution. Once the roadmap was in place, we worked closely with SleepyHug to implement changes across manufacturing, warehousing, logistics, and tech.

Each move was designed not just to solve today’s inefficiencies but to future-proof their D2C journey. Here’s how we put the plan into action and what it led to:

Manufacturing and inventory depth

We knew scaling a mattress brand hinged on consistent quality and capacity. SleepyHug didn’t just need more units, they also needed a partner with deep domain experience.

We secured a tie-up with a manufacturer with 40+ years of expertise. This gave SleepyHug reliable raw material sourcing, proven processes, and the ability to ramp production up or down without delays.

The result was almost immediate: zero manufacturing bottlenecks even during festive spikes and a foundation for long-term supply chain optimisation.

Warehousing redesign

To cut delivery times and widen reach, we restructured warehousing into regional hubs. Instead of a centralised model, stock was pre-positioned closer to high-demand areas. This shift enabled 48-hour metro deliveries while still covering over 20,000 pincodes nationwide.

It wasn’t just faster; it lowered freight costs and gave customers a more predictable experience. This was critical in the D2C market in India, where expectations are shaped by giants like Amazon.

Taking back control from 3PLs

Third-party logistics partners were driving delays, mishandling, and unpredictable SLAs. Instead of staying dependent, we built in-house operations where it mattered most. This meant SleepyHug could set and enforce its own standards, from delivery timelines to packaging checks.

The payoff: fewer damaged orders, higher first-attempt delivery rates, and lower costs tied to returns. For bulky categories, this ownership turned out cheaper and far more reliable than outsourcing - true optimisation of supply chain.

Tech stack integration

One of the biggest drags we saw was fragmented visibility. Orders, inventory, and finances were in different silos, so the team was always reacting late.

We integrated OMS, WMS, and ERP into a single flow. Here’s what each piece means in practice:

• OMS (Order Management System): Tracks every order from marketplaces, D2C sites, or offline channels in real time.

• WMS (Warehouse Management System): Controls how stock is stored, picked, packed, and shipped inside warehouses.

• ERP (Enterprise Resource Planning): Connects finance, procurement, and operations so the business side and supply chain side always stay aligned.

Suddenly, SleepyHug had SKU-level insights in real time. Stockouts were spotted early, allocations became smarter, and reconciliation stopped being a weekly headache.

These integrated supply chain optimisation technologies gave SleepyHug the transparency to manage operations proactively.

Marketplace-driven stock planning

SleepyHug’s growth was tightly linked to marketplaces like Flipkart and Amazon. But because we plugged ERP into these platforms, SleepyHug no longer had to plan its inventory in isolation.

Campaign forecasts, payouts, and fees were now synced with inventory decisions. That meant replenishments were driven by real marketplace demand signals.

This alignment turned inventory planning into a true extension of SleepyHug’s go-to-market strategy, ensuring supply met every marketing push.

Now there were fewer stockouts during sales events, healthier margins, and alignment between marketing pushes and supply availability. Hence, turning supply chain network optimisation into a direct driver of growth.

Intelligence through Intellsys

Planning needed more than data; it needed intelligence. We implemented Intellsys, our AI-powered marketing tool, to forecast demand, optimise SKU placement, and track daily P&L.

The tool pulled signals from multiple sources: marketplace demand trends, warehouse stock levels, lead times from suppliers, and even historical seasonality. It stitched all of that into daily, actionable insights.

Here’s how it played out in practice:

• Forecasting peaks with confidence: By reading demand patterns from Flipkart and Amazon alongside historic data, the tool predicted surges with 90% accuracy. That gave SleepyHug time to ramp production before campaigns went live.

• Smarter SKU placement: The system identified which products would move fastest in which cities, so stock was positioned in the right regional hubs. This cut both delivery times and freight costs.

• Reducing wastage: Instead of overstocking “just in case,” our tool flagged slow movers early. That freed up capital and avoided tying money up in idle inventory.

• Tracking margins daily: A live P&L dashboard showed unit economics in real time. If a spike in returns or delivery costs appeared, the team knew instantly and could course-correct.

Intellsys transformed operations from guesswork to predictive planning - proof of how the right supply chain optimisation technologies can change the game.

Reverse logistics design

Returns were quietly bleeding margins. Mattresses, being bulky, are expensive to move back, inspect, and refurbish. Building a resilient D2C business model in the mattress industry demanded standardised flows for pickups, warranty checks, and refurbishing.

We built a structured reverse logistics flow: standardised pickup SLAs, warranty adjudication, and faster refunds. This cut return-related costs by nearly 40%, reduced customer frustration, and freed up working capital.

By embedding reverse logistics into the overall plan, supply chain optimisation stopped being just about moving products forward; it became a complete, closed-loop system.

Results: What supply chain optimisation delivered for SleepyHug

Implementing changes across manufacturing, warehousing, logistics, and technology only matters if it shifts outcomes.

For SleepyHug, every intervention turned into measurable improvements. There was faster fulfilment, stronger margins, and more trust from customers. Together, these wins made their journey predictable and scalable, showing exactly how SleepyHug captured the D2C space with supply chain as its backbone.

Here’s what the transformation looked like:

• Faster fulfilment at scale: Regional warehousing and in-house control enabled 48-hour deliveries in metros while covering 20,000+ pincodes nationwide.

• Lower return-related losses: A structured reverse logistics process cut return costs by nearly 40%, protecting margins and freeing up cash.

• No more stockouts during peaks: Marketplace-driven stock planning and forecasting ensured the right SKUs were always in place, even during festive surges.

• Real-time visibility: Integrated OMS, WMS, and ERP created a single source of truth, turning reactive firefighting into proactive planning.

• Customer trust as a growth lever: Fewer delays, smoother returns, and faster refunds built loyalty, fuelling repeat purchases in the competitive D2C market in India.

Key lessons for D2C founders on supply chain optimisation

If there’s one thing SleepyHug’s story proves, it’s that growth isn’t just about marketing spend - it’s about getting the backend right. Founders reading this can save themselves a lot of pain by learning from the bumps SleepyHug hit along their D2C journey.

Nail these things early, and you’ll avoid costly mistakes while setting yourself up for scale in the D2C market in India.

Here they are:

• Don’t outsource your moat: Relying only on 3PLs left SleepyHug vulnerable. Bringing critical flows in-house turned control into a competitive advantage and proved that true optimisation of supply chain often requires ownership.

• Invest early in technology: Integrating OMS, WMS, and ERP gave SleepyHug real-time visibility and removed silos. Without such supply chain optimisation technologies, decisions remain reactive and margins suffer.

• Reverse logistics is part of growth, not a cost centre: Returns were quietly eroding margins until we designed a structured flow. This lesson applies across categories: sustainable scale requires reverse logistics to be embedded into supply chain network optimisation.

• Customer experience is built on operations: Faster refunds, fewer delays, and predictable deliveries made SleepyHug a trusted brand. For any D2C journey, customer loyalty often comes less from ads and more from operational reliability.

• Data should drive every decision: Using Intellsys for data management and forecasting allowed SleepyHug to predict demand instead of chasing it. Without data-led supply chain optimisation, growth will always be unstable.

Why supply chain optimisation is the real growth engine

Scaling a brand in the D2C market in India often looks like a marketing game from the outside. But SleepyHug’s story proved the opposite: ads and awareness can bring demand, but without a strong backend, that demand quickly turns into cancelled orders, bad reviews, and wasted money.

Their D2C journey showed us that supply chain optimisation is not an operational afterthought, rather, it’s the very thing that protects margins and builds trust. Deliveries got faster, costs came down, and customers kept coming back, all because the supply chain was finally working in their favour.

For founders, the takeaway is clear: investing in the optimisation of supply chains early pays dividends in growth and resilience. If you’re looking to build a similar engine, or want to go even further, GrowthJockey can help as your business accelerator in india, working alongside you to create the foundations that last.

FAQs on supply chain optimisation

What is supply chain optimisation?

Supply chain optimisation is kind of like tuning the whole production engine, from procurement to doorstep, so it runs fast, lean, and reliably. Done well, you ship on time, lower costs, and keep promises customers remember. For brands in the D2C market in India, it’s often the quiet lever that makes a D2C journey scalable.

What is inventory optimisation in supply chain analytics?

It’s the art (and math) of keeping the right SKUs in the right warehouse at the right time. Using analytics across ERP/OMS/WMS, you balance demand forecasts, safety stock, and holding costs so cash isn’t stuck on shelves.

What is supply chain optimisation and how is it achieved?

You align the network, the systems, and the decisions. Practically: supply chain network optimisation (where to place stock), unified systems (OMS + WMS + ERP), forecasting, and a crisp returns playbook. This is amplified by supply chain optimisation technologies that give real-time visibility and alerts.

What are the technologies used in supply chain management?

Start with OMS, WMS, ERP and a TMS for routing. Layer forecasting/BI for demand and margin visibility, automation for repetitive ops, and conversational support for exceptions. Together, these supply chain optimisation technologies turn data into “move this, ship from here, fix that” decisions.

Which technique is used for supply chain optimisation?

A few that move the needle:

• Demand forecasting: Predicting future sales patterns to match supply with demand.

• DRR-style replenishment: Dynamic demand-driven restocking so fast-moving SKUs never run dry.

• Supply chain network optimisation: Using regional warehouses and multi-carrier routing to cut costs and speed up deliveries.

• ABC/XYZ classification: Grouping SKUs by value and demand variability to prioritise what matters most.

• Dynamic safety stocks: Adjusting buffer stock levels in real time instead of keeping fixed thresholds.

• SLA-driven reverse logistics: Building structured returns and warranty flows that protect both margins and customer trust.

Use them in concert; that’s real optimisation of supply chain.

How can Gen AI optimise supply chain?

By predicting demand at SKU×region, spotting anomalies (returns spikes, carrier delays), and recommending inventory placement, before problems show up. It also links ops to your D2C marketing strategy (stock where you plan to advertise), drafts exception comms, and suggests next-best actions.