Warehouse management: optimizing procurement and reducing stock and shortages
Case Study: optimizing procurement to reduce stock, avoid shortages, and improve material management in production.
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Automotive
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Logistics
Unstructured warehouse management
The reason the client contacted us was that they had a set of approximately 3,000 SKUs in the warehouse, managed visually by operators. This system generated significant issues: production shortages, overstocking caused by incorrect planning, and a high number of inefficiently generated orders. Our goal in this project was clear: to define and implement an effective procurement policy capable of resolving existing criticalities, improving production logistics, and material control.
Defining an effective procurement management model
The project introduced structured logic for material management, improving the balance between stock, shortages, and operational activities.
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Client Industry
Company active in the automotive sector, with approximately 3,000 SKUs managed in the warehouse and a need to improve material management.
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Initial Situation
Procurement based on experience and visual logic, without a structured planning system.
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Critical Issues Identified
Excess stock and frequent material shortages, with impacts on production and costs.
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Project Objectives
Defining effective policies to improve material control and production continuity.
Definition of procurement policies and parameters
We intervened with a structured approach, starting from the analysis of consumption and the characteristics of the materials managed in the warehouse. Based on these analyses, we defined specific procurement policies, distinguishing between requirement-based management and controlled stock management. For stock-managed SKUs, we introduced parameters such as procurement lot, safety stock, and reorder point. The identified solutions were validated through a simulator we developed, which allowed for the evaluation of different scenarios in terms of stock levels, shortage frequency, and number of orders. Once the optimal configuration was identified, we implemented the parameters within the company’s management system, making the model operational and integrated into the processes.
Analysis, policy definition, implementation
The project developed through data analysis, the definition of procurement policies, and the implementation of parameters in the management system.
Step 1
Consumption study
Analysis of consumption and material characteristics to define management logic.
Step 2
Management policies
Introduction of requirement-based and stock-based management with specific logistical parameters.
Step 3
System parameters
Configuration of parameters in the management system and launch of the new operating model.
Stock reduction and guaranteed material availability
The project improved warehouse management, allowing for a reduction in stock levels and ensuring material availability without increasing operational effort.
Project Deliverables
Reduction in the total value of inventory, thanks to optimized procurement policies.
Elimination of material shortages, even during periods of peak demand.
The operational workload of the purchasing department remained unchanged, despite a significant improvement in performance.
More structured material management and greater visibility into procurement dynamics.