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Optimising Your Network Of Warehouses and Stocks

CHALLENGES

● Company owned 67 warehouses to serve B2B clients in the country Warehouses were also used as stock pick-ups and deliveries 

● Weak communication between warehouses Same SKU could be repeatedly available in several warehouses 

● Commercial organisation was a mirror of the warehouse geographical coverage (cluster)

ACTIONS TAKEN

● Built analytical model to optimise overall costs (transportation + warehouse + inventory + staff) 

● Considered minimum service levels to deliver goods do customers for each cluster 

● Separated the geographical connection between commercial and logistical coverage

RESULTS

● Reduced the number of warehouses to 15 with an overall cost reduction of 17% compared to baseline 

● Increased part availability as they were more concentrated in few stock-points 

● Sale and write-off of 52 warehouses from balance sheet 

● 7% increase in company’s ROACE (Return On Capital Employed) in two years

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