The OM Team offer finds specific applications to the Retail and Distribution industry, thus appropriate optimization solutions have been studied and tailored to be applicable focusing on the logistics.

The intervention areas mainly consist of inventory management and planning processes, of distribution network and warehouse design and management, both in terms of operations and layout.

Inventory Management & Planning

Main issues

  • High stockholding cost of materials
  • Large level of working capital
  • Quick deterioration of stock
  • Inefficient reorder policies
  • Lost sales due to mismatch between assortment and requests

Proposed solutions

  • Warehouse overstock and service level evaluation – Inventory level analysis per SKU and comparison with the optimal stock level, service level evaluation and comparison with the desired state
  • Reorder policies definition (procurement) – Definition of order sizes and reorder interval (in relation to shelf-life, minimum order quantity and service level), inventory models analysis (e.g. VMI, VMO)
  • Definition of retailers’ product mix and volumes (distribution) – Analysis of the right product mix and volumes of retailers, replenishment mode and timing analysis and management

Distribution Network design & Management

Main issues

  • High distribution cost and secondary logistics cost
  • Unbalanced distribution network and unexploited Distribution Centres (DCs)
  • Unsaturated or redundant distribution routes
  • Difficult evaluation of the eventual logistics platforms centralization

Proposed solutions

  • Transportations costs analysis & reduction – Evaluation of the costs impact on turnover or transportation unit, individuation and categorisation of factors for the transportation costs reduction
  • Distribution network design & optimization – DC opening/closing assessment in relation to the distribution network, analysis of capacity increase/reduction or movement of DC
  • Distribution flow analysis & optimization – Evaluation of the flows between DCs to improve distribution costs, distribution flows analysis and balancing to reduce congestion of network’s nodes

Warehouse Design & Material Handling management

Main issues

  • Large handling times and congested handling areas
  • Insufficient storage and/or picking spaces
  • Poor accessibility to most frequently moved products
  • Difficult evaluation of the opportunity to automate warehouse operations

Proposed solutions

  • Warehouse design – Analysis of the optimal organization of warehouse areas and layout design, definition of the optimal layout of areas
  • Material Handling & Automated systems warehouse – Material Handling flows re-design and optimization, definition of the optimal automation level and automated systems design
  • Storage policies optimization – Definition of the optimal storage policies (dedicated/randomized), definition of the warehouse slot-code allocation

Processes & Business strategies

Main issues

  • Poor level of knowledge of procedures
  • Inefficient processes and low automation level
  • Lack of tools for controlling the performance of processes
  • Difficult evaluation of project initiatives
  • Low control of project timing and cost

Proposed solutions

  • Business Process Management & Optimization – Process mapping for optimization and/or automation, user requirement specification (USR) analysis and Vendor Selection
  • Performance Management System design – Individuation of KPIs and criteria for calculation and analysis, data collection systems identification, evaluation of the priority implementation
  • Business evaluation & Projects support – Business Case development for the evaluation of business opportunities, definition of strategic Business Plan and project support

For further information, click HERE