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Agio Cigars
Optimizing CODP and minimizing stock
Description
Agio Cigars is one of the leading cigar manufacturers in Western Europe offering brands such as Agio, Panter, Balmoral and Mehari. Every year, over 700 million cigars are produced and sold in more than 100 countries all over the world.
Opportunities
The production of a cigar consists of about 10 different process steps. Agio Cigars wants to know if the CODP (Customer Order Decoupling Point) can be moved to an earlier point in the production process. This saves inventory, because the number of items that are kept on stock decreases. On the other hand it leads to additional handling costs, because of shorter production runs and more fluctuations.
Solution
The optimal location of the CODP was calculated. The different process steps and the quality of this natural product formed the starting points. Different scenario’s have been calculated and compared with the current situation. The optimal position of the CODP was determined based on costs for:
- Interest, depreciation and handling goods
- Change over machines and employees
- Additional idle time fixed employees and machine due to more flexible production schedule.
Benefits
- Optimized CODP, based on quantification of all related costs
- Indication of development path for new packaging and finishing machines for future
- Integral Production Planning over business units
- Supplier performance measurement to limit stock of packaging material.
Logistics
Consumer products
Northwestern Europe |