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Design of stock management policies and planning model

Legumbres Luengo

Legumbres Luengo is a Spanish company leader in the pulse industry with more than a hundred years of history.

That means they offer a wide range of high quality dried and cooked pulses not only for Spanish market but for international consumers too. Their factories are located in Riego de la Vega and Onzonilla, both in León province.

The Project

Having an important growth during the last years that triggered an expansion if their factory and warehouse, the client asked us to calculate optimum warehouse model to stock finished goods for both infraestructures and processes. To start with this project, a previous phase should be done to define warehouse sizing: a deep analysis of production planning processes.

Articles were classified according to demand type and frequency, sales volume and production complexity. Then stock policies were defined including minimum production batch. With these parameters, finished goods stock levels and cycle inventory levels were calculated by SKU for current and future scenario with a 5 year horizon.

Last but not least, an evolutive production planning model was defined to be enabled in SAP ECC, their ERP.

The Results

The client approved the results from the model that were used as an input to the warehouse design.

Furthermore, they implemented stock management policies defined in their ERP, expecting an improvement in service level.