Provider of paper-based packaging
About the company
Our customer is a globally operating company and one of the leading providers of paper-based packaging with 350 production sites, being present in 21 countries in Europe and 12 countries in the Americas.
The challenge
The customer had a high total cost of warehousing, mainly due to the use of expensive external warehousing. Seasonality created an unbalanced situation between demand and supply; swings were absorbed by renting external warehousing. They organized the warehouse capacities locally and often short-term. There was a lack of coordination in demand and supply, and warehouse requirements. The customer also had a high level of ‘hidden’ costs by transferring material back and forward between internal and external warehouses.
The project
Together with the customer, we collected all data (e.g. costs, value stream map) regarding warehouses and transport modes. We developed a European paper warehouse model whereby:
- total cost are optimized
- alternative transport modes (e.g. rail / water) are taking into consideration
This allows the customer to run different footprint scenarios to optimize the current situation and simulate potential future footprints with new or consolidated warehouses.
Results
The project resulted in a complete database with warehouse tariff and capability information, and inventory and warehouse capacity projects to support S&OP planning. The customer now has an optimized network of warehouses that provides the lowest total cost and which warehouses should or shouldn’t be used in the future in times of overflows of stock. With the won insights they can negotiate better warehouse tariffs due to consolidation of contracts. EyeOn also provided business case information to build their own warehouse to reduce warehousing costs in the long term.
Ready to reduce your warehousing costs?
Get in touch with us to learn how our specialists can help you create an optimized warehouse model that enables you to consider alternative transport modes and optimize overall costs.