Order quantity optimisation
How a Dutch family-owned manufacturer of industrial vehicles found up to 75% cost savings per SKU by letting a model decide order quantities — and won the inaugural Celonis Use Case Championship with it.
Tens of thousands of SKUs, every day.
This is a story about a Netherlands-based, family-owned business specialising in industrial vehicles and environmental loading systems. It has expanded its reach to nine countries, with over two thousand employees, managing tens of thousands of SKUs as part of the daily routine.
Developed with DataLane’s OQO, this use case was recognised as one of the winners of the inaugural Celonis Use Case Championship at Celosphere 2023 — selected from over 100 unique ideas.
Avoiding stock-outs, at any cost.
The procurement team was primarily focused on avoiding stock-outs, with costs hardly part of the equation. The Data Science Manager discovered they were missing out on substantial quantity discounts, costing up to 90% in potential savings. With an annual spend of hundreds of millions, even a 1% improvement would be significant.
Optimising the purchasing of tens of thousands of SKUs on a daily basis is beyond reasonable human capacity. The production schedule, known 12 to 18 months in advance, is a blessing for batching similar vehicles together and a curse for SKU demand: it fluctuates through the year in ways standard lot-sizing procedures do not account for.
The result was labour-intensive, ad-hoc adjustments, and material shortages in one period followed by excess stock in the next.
A model that weighs every cost at once.
While the impetus came from leveraging quantity discounts and avoiding stock-outs, it became clear that material cost was only one piece of the puzzle. Transport, holding and obsolescence costs matter too, as do vendor agreements on lead times and on minimum, maximum or multiples of order quantities.
DataLane introduced the Order Quantity Optimizer: a flexible mathematical model that, given the client’s business restrictions, calculates optimal order quantities per period for minimal total cost.
A pilot was conducted on 250 SKUs in one of the warehouses, comparing OQO’s recommendations against the decisions actually made.
- Client
- Family-owned industrial vehicle manufacturer
- Scale
- Nine countries, 2,000+ employees
- Tool
- OQO — Order Quantity Optimizer
- Recognition
- Celonis Use Case Championship, 2023
What made it hard to fix
- Tens of thousands of SKUs, adjusted daily
- Demand swings that lot-sizing rules ignore
- Material, transport, holding and obsolescence costs pulling in different directions
- Vendor agreements on lead times and order quantities
What it delivered — and what made it stick.
Business value
- Up to 75% cost savings per SKU, translating to millions in annual savings.
- A procurement team with confidence in its orders.
- Less manual work, and more transparency behind every order quantity.
- Recognised as a winner at the inaugural Celonis Use Case Championship.
Adoption
- Proved on 250 SKUs against real decisions before going any wider.
- Now being implemented across all warehouses.
- The model works inside the client’s own vendor agreements and restrictions.
- Procurement keeps the decision; OQO does the arithmetic.
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