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| Case Study |
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Patni's SAP-based warehouse consolidation solution enhances distribution efficiency
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Overall inventory levels dropped 45% due to pooling of inventory amongst corporate entities across East Europe.
The Client
A Fortune 500 company engaged in the development, manufacture and sale of a wide range of grooming products.
The Challenge
The client's operations are spread across five continents. Decentralized logistics operations in individual countries led to inefficient inventory planning and management. Often, products were short in supply due to lack of harmonized planning and stock deployment. This impacted the client's ability to timely respond to customer requests.
Specifically, the operations in Eastern Europe were not optimal. It was therefore decided to consolidate the East European Warehouse operations. The challenges included:
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Enabling inventory pooling to a single location, yet providing the ability to quickly sell/transfer the inventory to other legal entities. |
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Reducing transactional times to a minimum, while maintaining customer service levels. |
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Incorporating complex East European statutory requirements into the solution design. |
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Designing the solution for central logistics operations in coordination with other markets in the hub. |
The Solution
The entire project was co-ordinated by Patni between onsite-offshore and offsite locations to accomplish configuration, developments, SAP enhancements and reporting. This included co-ordination with development teams located in three continents, namely Asia, North America and Europe. A significant amount of GAP analysis was carried out offshore, via teleconferencing.
Patni's solution included:
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Re-design of the enterprise structure in SAP to enable centralized distribution from a hub to various neighboring markets. |
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Design and implementation of suitable inter-company processes in SAP, to enable the order fulfillment and order management processes to function smoothly. |
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Harmonization of existing order management/fulfillment processes for the whole of Europe and segregation of processes around domestic, international and inter-company businesses. |
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Implementation of interfaces between external warehouse systems and SAP for inventory management and planning. |
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Reconfiguration of the master data in sales, materials, pricing configuration, billing, etc. |
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Modification and fresh creation of, both, management and statutory reporting, as required by each market. |
The Technology
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SAP R/3 - Sales and Distribution, Materials Management |
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Third Party Logistics - ALE/IDOC |
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The Benefits
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Patni helped the client evaluate potential business process changes and the trade offs involved, when implementing the warehouse consolidation solution. |
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Improved fill rate and faster response to customer requirements. |
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45% Reduction in overall inventory levels resulting from shared safety stock, arising from the ability to pool inventory amongst the legal entities; Estimated annual savings: $100,000. |
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Reduction of Distribution Centers and the implementation of automatic interfaces, provided savings in vendor expenses and deployment expenses. |
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Elimination of the need for physically redeploying stock between countries. |
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Reduction in application costs as a result of systems wide harmonization of processes. |
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