Key Information about the client based of Oil Industry
Origin: 100+ year old organization with roots in Europe, clocking turnover of 5000+ cr in India
Scale: Manufacturing plant: Owned: 2, Outsourced: 3, CDC : 4, No. of Orders : 5000+, Inventory value: 100cr+ in CDC. 1400+ SKUs
Current Setup: Manual Processes for Inbound, outbound movement of inventory with SOPs which need to be evolved
The problem
Inbound
Large Mix of SKUs leading to:
- High GRN to putaway time.
- Discrepancies in inventory sanity, as good were dispatched without proper putaway
- Inaccurate putaway due to manual intelligence leading to inventory redundancies & expiries.
Outbound
- Keeping a track or orders from different channels (Wholesale, retail, modern trade) was difficult.
- Monitoring SLA of different channels & maintaining desired order velocity was getting difficult with increasing volumes.
- High back order ratio.
- Order inaccuracy.
- Low order fulfilment
Warehouse Operation
- Cycle count discrepancies leading to low inventory accuracy and inventory obsolescence.
- Monitoring bin to bin movement was difficult leading to low inventory & FIFO accuracy.
- Inefficient data for monitoring real-time delays.
- Managing stocks at different stock points was not possible real-time.
Challenges deep-dive
Improper Layout Management
Discrepancies in virtual layout vs physical layout was leading to: High putaway and picking lead time. Low order accuracy. Inventory misplacement. Low FIFO/FEFO accuracy.
Inventory Obsolescence due to
- Difference between inventory value on system and physical inventory on ground.
- Inaccurate inventory information in respective zones and bins.
- Inaccurate management of pallet inventory for both used and available pallets.
- Inefficiencies in break-bulk operation leading to unit level inventory mismanagement.
- After schedule/delayed cycle-counts leading to mismatch in physical inventory of different stock points as compare to ERP value.
- KPIs like order fulfilment time, picking and putaway lead time.
- Inefficient shelf life management leading to redundancy of aged stock and high inventory carrying cost.
Compliance Management
- Identifying adherence/deviation from defined SOPs was a challenge.
- Any delays/escalation were invisible to top management/respective decision makers.
- Management of damaged/returned inventory was tedious and cumbersome
Solution
- Omneelab after deep diving into their challenges formed a team comprising of an SME (Subject Matter Expert), Solutions Architect, Pre Sales Manager led by Account Manager.
- The team configured different flows to incorporate their requirements and delivered an end to end solution to solve their inventory silos.
- Omneelab went an extra mile to provide extended training to their employees to help them accommodate the change in an efficient and effective manner.
Phase wise Solutioning for Oil Industry
Phase 1 – Digitization
- You cannot Improve what you cannot measure. Hence we created a system for their ‘As is’ process, where we digitized their current processes and started measuring the inefficiencies.
- All the processes wrt Inbound, outbound and internal processes like Assembling/Manufacturing, packing, putaway and picking were digitized to capture relevant data and identify bottlenecks
- Key Driver: Change Management
Phase 2 – Automation
- During digitization we understood the need of automating data flow between the ERP and Omni-Stock, therefore we did API integration.
- We also created certain custom reports for the client and automated it to get delivered via email every morning.
- We created real time dashboards for helping the management take immediate action in case of deviations from standard SOPs.
Phase 3 – BPR
- After Digitization and automation we understood that there is a definite need to conduct Business Process changes across the value chain. We started creating new processes around inbound/outbound and kitting operations.
- We started with layout changes, introduced dynamic bins through palletization, created barcodes for item tracking and QR codes for storing box level information and expedite picking.
BPR
GRN Optimization through Palletization
- The staging time was quite huge post GRN hence the consumption of Fast moving SKUs was happening before Put away.
- We introduced pallets, maintained inventory of used and available pallets, and provided identity to each pallet through barcode.
- After this, after GRN the Goods were placed on pallets and each pallet was moved to the system suggested location for putaway.
Barcoding and QR Coding
- It was found that they had multiple SKUs in multiple packaging. There were 1L, 2L bottles, barrels, boxes with single SKU and in some cases one BOX contained multiple SKUs. Therefore we introduced Barcodes where only identification was required and we introduced QR codes where one box contained multiple SKUs or the Box in-unit out sort of dispatched are required, specifically in case of B2C orders
Implementing Scanning based operations
- Post bringing in these changes we enabled the team with Hand Held terminals for scanning the locations/goods before putaway and picking. We kept certain checks and balances in the system which forced the ground staff to adapt to the change. For initial hiccups we provided editable rights to the admin which were later removed to ensure accuracy of operations and better inventory visibility.
Impact
- Inventory Accuracy Increased from 88% to 96% within a span of 6 months and 100% within one year
- Warehouse Capacity utilization saw a rise of around 10% shifting the warehouse usage from stretched to standard
- Inventory Holding cost reduced significantly with better space utilization and better labor productivity
- The average picking time reduced by 20% per item
- FIFO accuracy saw a jump of 20% from 78% to 98%
- Inventory obsolescence due to expiry and ageing reduced significantly
- C-Sat scores improved significantly due to reduced back order rates and timely dispatches
- The Business critical decisions were supported by data in the form of KPIs monitoring and intuitive dashboards
- Overall quality of life of people within the warehouses improved significantly
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