Logistics Optimisation Model (LOM) releases ’Gainshare’ efficiencies

Logistics Optimisation is at its most simple, a structured review of all costs and activities to improve performance, efficiencies and eliminate waste.

Gainsharing increases profitability by motivating all parties involved to have a better understanding of each others long-term plans and objectives. Fostering a pro-active longer-term relationship, helps both sides take a long-term view and the resulting savings identified are shared. Savings can be financial or some other benefit, for example; delivering shorter lead times. The potential for mutual advantage is the key to Gainsharing.

Working in true partnership delivering continuous cost-saving initiatives to benefit both parties

This concept was agreed through several forums involving the senior management and directors within both organisations.

The next task was to agree the process and project resource to be utilised to manage each Gainshare work package.

A team of R&HA project support partners were assembled, trained and deployed to engage the task. An individual project evaluation process was designed to give a transparent and structured approach to deliver each targeted Gainshare objective.

By following the process of individually evaluating a number of goods-in, putaway, picking, Sequencing and delivery streams the PSP’s were able to identify a multitude of process and storage type and location adjustments. This would streamline a number of processes and realise operational savings, thus presenting gain-share reward for both parties.

The Gainshare and Logistics Optimisation Model (LOM) agreement commenced at the start of 2016 and has since delivered overall cost savings of the equivalent £000’s for the OEM. The savings are targeted to nearly double by the end of 2016.