International Company in healthcare, collaborates with 3PL provider for storing and handling their products and spare parts.
This 3PL provider supports different departments (Sales, After-Sales Service, etc) and charges a fixed monthly storage and handling fee without any cost allocation to the different cost centers.
Following a detailed analysis of the company’s needs and several discussions with the key stakeholders, LPS and the team identified the following issues:
- Limited storage space needs
- Significant stock level fluctuations throughout the year, without seasonality
- Large variety of storage needs (from big non-stackable crates to small spare parts with an expiration date and tracking need)
- Impossible to allocate costs to company’s Cost Centers
LPS, utilizing international practices and tools :
- Redesigned the storage and handling model to support company’s current and future needs
- Performed a market research in the 3PL industry
- Submitted a proposal with a detailed project roadmap, timelines and expected cost reduction
LPS and the team implemented the proposal and:
- Achieved a 37% reduction in Warehouse costs
- Implemented a robust Reporting system that is providing full visibility to the management in all transactions and charges for each cost center
- Signed a new agreement with the 3PL provider with beneficial terms and conditions for the company, without the cost of changing suppliers