CUSTOMER CASE STUDY

The client’s volumes were growing, but a lack of warehouse space negatively impacted KPIs.

Results

20% – Production downtime reduction
98% – Inventory accuracy
6 months – Impact achieved

Story

The client manufactures a wide range of electronic products, both sub-assemblies and finished products for industrial, communication, and medical segments. Growing business volumes resulted in increased stock of raw materials and finished goods. Limited by internal storage space, the client started to use several external warehouses, resulting in poor inventory control, late deliveries for production and high value of stock discrepancies.

The 4-week Phase 1 analysis used Value Stream Mapping and data analysis to model a consolidated scenario using a single external class A warehouse provider. The new provider would provide storage for both smaller shelved components and for bulk palletized storage, with a WMS system linked to the client’s ERP system.

During the implementation, we supported a cross-functional team including the client and the selected 3PL, holding regular reviews and workshops for a rapid implementation, with a focus on service optimization, pull-based delivery, regular cycle counts, and the EDI connection between the provider’s WMS and the client’s ERP system.

Conclusion

We achieved the following results:

  • A single provider for both storage and transportation to site
  • Improved inventory accuracy from < 80% to >98%+
  • 20% reduction in production downtime
  • Reduction of inventory write-off from $300K to <$10K / yr.
  • On-site customer presence for receiving & incoming quality
  • Inventory accuracy increased to 99% in the next 12 months

Pacellico Blog