
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