Metro optimizes its Inventory Management System with SAP WMS

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Santiago’s subway is the heart of Chile’s capital city public transport system and is managed by the state-owned company Metro S.A. One of the most modern systems in the world, with almost three million passengers travelling through it daily, during 2018 it moved more than 712 million people, a record for this means of transportation.

Currently, it has 7 subway lines, 136 stations, and a total extension of 140 km, with two expansions under construction, adding 7 new stations and 8.8 km to the network by 2022. Additionally, the future Line 7, estimated to be inaugurated in 2025, will have 21 stations in a 25 km extension connecting the Renca and Vitacura communes.

Furthermore, studies have already begun for the construction of two new subway lines: Line 8, which will connect the La Florida and Puente Alto communes with Providencia, while Line 9 will connect downtown Santiago with the commune of La Pintana. Line 4 will also be extended with 3 new stations and Line 6 with a connecting station to Line 7.

This dynamics and constant growth needs to be sustained by a first class inventory management, as having the supplies opportunely is a critical factor for an optimal operation of the existing lines – which have different and varied train technologies – as well as to meet the planned deadlines for the lines under construction. On the other hand, the control and tracking of spare parts and supplies in circulation is essential to keep costs within budget, both for the current operation and future developments.

To support its financial and operational management, Metro implemented SAP ERP 10 years ago and currently has the SAP Warehouse Management solution for its three warehouses. However, its stockrooms – smaller warehouses with high and medium rotation stocks – were managed manually until this year. Therefore, the Procurement and Supply Chain Division began in 2019 a project to implement the SAP solution for warehouse management which is already in use for the stockrooms.

The project, overseen by Franco Carrillo, logistics control and planning engineer, began a year before its implementation in order to finish a series of tasks needed beforehand: improve infrastructure, increase wireless network coverage, barcode labeling of supplies and locations, and the acquisition of mobile barcode scanners. Afterwards, there was a phase of process standardization where each of the activities necessary to achieve a successful execution were monitored and controlled.

Novis, who implemented Metro’s SAP ERP and oversees the operation and technical support of its SAP solutions, was selected to implement in four months the SAP VMS solution for the stockrooms.

Franco Carrillo, Project Manager, is very satisfied with the results: “We worked in collaboration, both with the end users, who were involved since the very beginning, and with Novis’ consulting team. Weekly follow-up meetings were conducted and when there was a delay, Novis made the opportune decision to add more resources so we could finish on time. We were therefore able to meet the committed deadlines.

He adds: “On account of this new system, we will be able to verify in real-time incoming merchandise for purchase orders, outgoing for maintenance orders, and transfers of materials and supplies between centers. In addition to providing real-time visibility for all stockroom processes, the traceability of supplies management is preserved, as it allows to know where they located, along with the associated information: lot number, type of product, quantity, expiration date, etc., which will help us with inventory accuracy, among other benefits. We are seeing significant savings in inventory management man-hours and this has given us the opportunity to redefine internal tasks.

This is a breakthrough for the area of Supplies and a contribution to management, since it is aligned with what Metro seeks: innovate, optimize processes, and improve efficiency to achieve the future objectives defined in the Metro 2026 strategic guidelines.”

Carlos del Valle, Business Manager at Novis, concludes: “We are truly satisfied with the outcome of this project. One of the main value contributions was the definition of a normalized base for processes and configurations, which allows the future incorporation of new stockrooms to the solution, that is, we delivered a replicable model. This will allow Metro to grow in warehouse management with minor impact in business processes and lower costs in specialist consulting”.

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