Panalpina, Cardiff University team up on lean inventories

Mike Wilson, global head of logistics at Panalpina and MBA graduate from Cardiff University in 1993, now finds himself working with his alma mater on a research project to forecast the demand of a company’s products and plan its inventory accordingly. With this partnership, Panalpina said it has become the first global logistics company to develop its own application that will help customers manage, forecast and reduce inventory levels in their supply chain.

Panalpina and the university’s Cardiff Business School started working on finding the “hidden formula” for streamlined inventories three years ago. The approach, based on the “lean manufacturing” principles of eliminating waste in business processes, is called “Demand Driven Inventory Dispositioning,” or D²ID.

“To achieve this, we have taken real inventory data from Panalpina and developed a unique product life-cycle algorithm based on leading-edge mathematical thinking,” said Nicole Ayiomamitou, lead researcher on the project, which was supported by the U.K. government.

The algorithm enables the research team to predict variation of inventories of many products across different industries, and estimate the maximum and minimum amount of inventory to hold for customers. From this data, Panalpina can calculate a good estimate of how much space will be needed at its facilities and what services to offer. The benefit for the customer is that they have a partner who will work with them to keep their product moving, yet minimize inventory, thus avoiding waste, when necessary.

Panalpina and Cardiff have launched two more two-year projects focusing on new manufacturing technologies. The aim is to help Panalpina’s customers identify the right products using 3D printing.