Learn how Coamo reduced stockouts using Neogrid technology
The company automated 90% of all transfer requests from its distribution centers using Neogrid’s DRP.
The process led to increased sales, improved service levels, and better inventory coverage for members.
CHALLENGES
If there was one major challenge that Coamo truly hoped to solve, it was the automation of the operational workflow for transfer requests from distribution centers to their warehouses.
Each store had the autonomy to request products from any other store or distribution center, regardless of location or inventory levels, without taking into account factors such as shipping costs or distances, for example. Furthermore, requests were processed manually, placing a heavy burden on internal resources—including personnel, technology, systems, traceability, and planning—resulting in virtually all of the team’s time being devoted to meeting these demands. The company’s goal was to achieve greater integration across departments and optimize operational workflow.
“Every day, a large number of transfer requests were generated, and we realized that it was not uncommon for them to lack a real need and to be submitted in a disorganized manner. This alerted us to the need to find a partner who could help us manage this flow” recalls David Evangelista, Key User of the Tool at Coamo.
The problem in practice. Imagine that Coamo had 100 units of a certain product in stock at the distribution center, and suddenly five stores ordered 50 units. What would happen? Three stores would be left without the product, since orders were fulfilled on a first-come, first-served basis, with no parameters other than a “service queue.” This resulted in zero inventory, lost sales, and, consequently, stockouts. The need for better management of this process was clear.
It was precisely this imbalance in inventory levels and the lack of constant monitoring of purchasing and restocking that resulted in supply gaps. Consequently, the supply chain was directly impacted, as producers and cooperative members who lacked the necessary items suffered directly because the product sometimes failed to reach the store they needed.
To begin addressing these issues, the company decided to create a department focused on logistics management. However, it lacked a tool to support the proper distribution of products. Neogrid DRP was implemented precisely to address these issues, optimizing operational workflow. Service levels improved due to the continuous availability of products, creating a balance between consumption and inventory.
In addition, the solution automated requisitions, significantly reducing the number of manual processes. Today, there is even an internal process in which any manual requisition is treated as an exception and sent to an approval area; in other words, the vast majority of requests are handled via Neogrid’s DRP (90% of the total).
With automation, they now have relevant information for decision-making, gaining a clear understanding of their own inventory.
"After implementing the DRP, we have significantly reduced the manual work involved in generating purchase orders. Since this entire operation takes place in the early morning, by the time we arrive in the morning, all the necessary requests for the day have already been generated, which greatly simplifies and speeds up our work. As a result, teams are increasingly specializing to focus on the work that truly adds the most value—analyzing results and continuously improving operations.”
says Ericson Zacarias, Logistics Planning Supervisor.
RESULTS
Before the DRP solution was implemented, all orders were placed manually.
· Since implementation, approximately 90% of orders are automated, leading to operational efficiency, reduced stockouts, and, consequently, increased sales.
· The company currently has 40% of all products integrated into the DRP and aims to reach 100% by the end of 2023.
This development led to an evolution in the company’s procedures, introducing concepts and methodologies that had not yet been used, which in turn generated positive results and satisfaction in both planning and operations.
· In the project’s initial phase, it already achieved results in reducing stockouts, generating more sales, improving service levels and product availability for members, and, consequently, aligning the Cooperative’s entire ecosystem with the harvests.
“Within the first few months of using the tool, we began to see the results we had hoped for. The reduction in manual labor, freeing up more time for our team to conduct analyses and improve the existing process, was of great value. Standardizing the process through the parameters the tool follows brought security and agility to our operation, giving us room to generate new project ideas for the continuous improvement of our operations,” Marcelo Adelino, Logistics Coordinator.
Larissa Peres, Neogrid Customer Success Manager serving Coamo, highlights the visit made to Coamo’s Distribution Center (DC), located in Campo Mourão, PR, where she was able to see the DRP in action and gain a deeper understanding of the client’s operations. "Over the course of two days, we were able to build closer relationships with our key contacts, conduct training with the teams, and visit—in addition to the DC—one of the main warehouses and all the complementary services that Coamo offers its members. Without a doubt, having this comprehensive understanding will allow us to deliver even greater value to the client.”
Currently, order suggestions are used for part of the cooperative’s network, but the goal is to have them fully operational by the end of 2023. The more Coamo products that are integrated into the Neogrid network, the faster and more efficient the distribution and purchasing processes will be.
With a diverse portfolio and an extremely extensive range of products, this type of inventory balancing project has further enhanced Coamo’s standing as an agribusiness cooperative, strengthening its relationship with its members, whose core mission is to provide services to the association.
“Agribusiness has evolved and sought the best solutions to optimize its planning and operational processes. And at Coamo, we are no different; we are always seeking solutions and partners that can contribute and help us achieve better results for our members. Our cooperative business model aims to always build strong, lasting relationships with our suppliers, and today we are certain that the relationship between Coamo and Neogrid will be another such example. “The DRP project, which is set to be expanded by the end of this year, has already shown us great results, particularly in optimizing our daily routines, but I have no doubt that there are many other areas where it can help us,” Lucio Flavio Barboza – Logistics Manager.
ABOUT
In 2022, Coamo accounted for 3.5% of Brazil’s grain production, demonstrating its strategic importance in food production at both the national and international levels.
The cooperative, which has over 30,000 members, received a total of 7.47 million tons in 2022. Soybeans are the main product received, followed by corn, wheat, and coffee. The processing of the received products aims to add value to members’ production and takes place at two industrial parks—one in Campo Mourão (PR) and another in Dourados (MS). In Paranaguá, on the coast of Paraná, Coamo operates a maritime terminal.
At Coamo, the 8,951 permanent employees, with their respective functional responsibilities, are responsible for managing the cooperative’s operations and activities.
