Real-time visibility of consignment stock consumption and replenishment control

For an international company, Logate optimized the supply chain by implementing an automated inventory management system at customer locations and service warehouses. The system forecasts product availability to suppliers, who replenish the stock in accordance with agreed-upon procedures. The system provides real-time alerts when supply issues that could slow down the production, the issues are identified at the earliest stages of the supply chain. This ensures a streamlined and efficient material flow, helping to prevent any deviations.

Starting point

Purchasing managers were responsible for monitoring product balances, forecasting product shortages, and ordering large quantities with long lead times. The agreed delivery times were not met, and product quality deviations introduced further complications. Safety stocks had to be maintained at a high level, yet at times the rush could catch them off guard. Unexpected peaks in demand and other disruptions occasionally resulted in products running out and significant rush delivery costs. Furthermore, the introduction of new versions resulted in significant non-conformity costs due to the necessity of maintaining large buffers in the supply chain.

The customer identified that the numerous, sizable stocks and contingencies within the supply chain were resulting in additional costs for both the supplier and the customer. They requested that the supplier assume greater responsibility for product availability and optimize production scheduling. Concurrently, the objective was to reduce inventory, exercise greater control over suppliers, streamline delivery lots, and automate the management of commercial stocks.


Logate provided the customer with RFID order terminals that were supplier- and product-independent, and remotely managed. These terminals were used to report on product sales in accordance with the Kanban principle. Deliveries to production are made in optimized batches to the workstations on a daily basis, based on consumption, via a one-touch process. From the customer’s production perspective, we optimized the use of space in the workstations, the organization of manual stocks, and the workflow.

The supplier’s buffers are located close to the customer in a warehouse hotel, where the products are quality checked, stored and packed in workstation-specific packaging sizes and labelled according to the customer’s process. The same warehouse hotel serves as the central distribution hub for replenishment of several points of use, including factories, shops, and hospitals. The supplier and customer have real-time visibility into product availability, events, and supply chain status.

The solution is capable of managing an unlimited number of suppliers and products in parallel. Forecast product availability for suppliers and control supplier manufacturing through a simple, visual report based on actual throughput.  Suppliers and purchasing managers have real-time visibility of product availability and delivery status across the supply chain, including in transit and in stock. Suppliers on different continents are able to determine the timing of production, provided that availability remains within agreed limits. The solution is completely independent of suppliers and products, allowing purchasing managers to select the most suitable suppliers and products without concern for the final delivery stages. Purchasing managers now have access to a comprehensive visual tracking report and are promptly notified of any discrepancies. They can therefore focus their attention on other aspects of their role, free from the burden of ordering.

Benefits of the solution:

  • Supplier and product-independent delivery control to the workstation
  • Efficient use of space and work at the workstation
  • Improved visibility into the supply chain. More self-direction and accountability for suppliers without losing visibility or availability.
  • Purchasing manager time savings estimated at 80% of time spent on store inventory processes (reporting, clearing, monitoring)
  • Approximately 30% of time saved in receiving and internal distribution, with documentation in line with the receiving process and direct marking of the point of use on the packaging
  • Savings in quality management and disruption costs.
  • Implementation projects as services with a short payback period

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