Warehousing Project

Warehousing Project

The Case

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.

The Challenge

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

The Steps

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

The Results

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