Challenge

A German company from the home entertainment industry delivers to dozens of marketplace fulfilment centers.

Previously, each purchase order generated by Vendor Central was processed directly to the warehouse management system as a separate transaction and charged to our client as per the agreed pick-pack-ship terms, resulting in higher overall costs.

Solution

Within our continuous improvement initiatives, we identified an opportunity to reduce pick-pack-ship costs through the implementation of order consolidation. Purchase orders generated by the marketplace for the same delivery address got held in our client´s ERP system, consolidated into a single transaction and released to the warehouse management system as per agreed call-off schedule, while still keeping all the reference details provided by Vendor Central. It translated into a tangible reduction of the transactions created in the warehouse and hence the reduction of the pick-pack-ship costs charged by the logistic center to our client.

Expert insight

„Thanks to this initiative, we managed to achieve a high level of Vendor Central order consolidation. Specifically, the ratio of the originally generated purchase orders vs. the number of transactions released to the warehouse decreased by a factor of 8.6 for the “first order” type and 3.8 for the “backorder” type within two years after implementation. This helped our client to realise significant cost efficiencies in the pick-pack-ship process.“

Lenka Adamová
Retail Operations Manager

Sony DADC European Service Centre