Case Study – Optimized Delivery Efficiency & Enhanced Cost Reduction

Optimized Delivery Efficiency & Enhanced Cost Reduction : Inventory Management

Situation

There are multiple warehouses (Distribution Centers) located in India and there exist common suppliers for each product. Also, these suppliers are located across the country. Warehouses order as per their requirement. Since the per trip loads are not enough to send a dedicated truck from supplier to each warehouse, receiving on-time deliveries and food safety of the products was a challenge.


This had affected inventory holding in warehouses leading to higher inventory carrying cost, high inventory days, threat of stock-out situation and in-transit damages, safety of food items in transit and higher inbound cost.


The need to transport products in a cost effective manner and ensure on-time availability without compromising on the integrity of the food products, was identified.

Solutions Strategy

Ensure consolidation of stock at the nearest warehouse and move full truck-loads. To make it happen following steps were taken:


  • Movement of full truck load (consolidated load from multiple warehouses) from supplier to the nearest warehouse.
  • Flexibility of consolidated movement viz. Freezer / Dry, Chiller / Dry etc in multi-temperature trucks.
  • Movement of stocks directly from vendor to the consumption warehouse in case of high volume / fast moving products.
  • Planned pickup and delivery from vendors at least 15 days in advance to ensure capacity utilization.

Results

  • Assured supply of goods by optimizing inventory and frequency of delivery.
  • Cost benefit due to optimization of truck load.
  • Assured safety of products in transit.
  • Inventory under control i.e. reduced inventory holding from 20 days to 8 days.
  • Reduction in Inventory carrying cost.