Pilot Implementation of Innovative Proposal for Service Level Improvement in a Spare Parts Trading Company

Abstract

In the context in which spare parts trading companies are becoming increasingly competitive, the level of service is essential to be able to compete in the market. This indicator is affected by on-time deliveries, which are a key factor in meeting customer demand, as this determines customer satisfaction and thus has an effect on the company's profitability. For a company to deliver its products on time, the warehouse processes must work efficiently, making the picking process one of the most critical of them. It must also run a proper inventory procurement process in order to have stock on hand to fulfill customer orders. This case study focuses on increasing the level of service in a company that sells spare parts for mining, which was found to have a low service level of 66.1%, in contrast to the recommended level for the sector, which is 85.9%. Therefore, the implementation of the 5S methodology, Systematic layout planning, demand forecasting, and cycle counting are proposed as tools to solve the root causes of the problem. The main results indicated a reduction in picking times of 36.70%, an increase in demand forecast accuracy of 13.45%, and an increase in Inventory Record Accuracy (IRA) of 5.42%.