In order to attain the service levels defined in customer agreements, customized swap units are held in stock in each market. The swap units are purchased directly from a factory and storage levels are excessively high due to unique unit specifications for each market. The business analysis identified that a more flexible supply of swap units would substantially lower the stock levels whilst preserving agreed service levels.
A new distribution solution was designed and built. The solution involved a central warehouse for generic swap units together with smaller storage locations in each market. Full visibility and control of the central storage, but also of the local storages in the markets, together with a customization process of swap units at the central warehouse, made the whole distribution chain more efficient. Vastly improved forecast and planning processes were also implemented.
Purchase volumes of new swap units were substantially lowered. Better information control and production of customized swap units made the solution more flexible and a more efficient usage of the generic swap units was attained.