Case Study 2: Inventory Storage Problem for Paolo’s Perogies

Case Study: Inventory Storage

Paolo’s Perogies while not a household name is well known in Perogie circles.

Paolo Verdun, the owner of Paolo’s Perogies is faced with a dilemma. The factory warehouse they are currently using is proving to be too small for their production needs. They are in need of approximately 250 sq. ft. of additional space to accommodate a new pasta machine he is intent on adding to their production infrastructure.

Moving heavy machinery would be no easy task as the Perogie making machinery is delicate and would prove to be difficult to disassemble and reassemble at a new location.

There was 3 years left on the existing lease that also would prove an obstacle to moving to a new business location.

In the hope of developing greater efficiency, Paolo drew up a floor plan of all the machinery and items within his warehouse.

One thing Paolo noticed when he drew up the floor plan was that with the arrival of his quarterly box inventory he had 10 pallets of boxes jammed against one side of his factory wall.

Paolo typically purchased his boxes in bulk to take advantage of the savings of larger purchase orders. Using a measuring tape he quickly calculated that one pallet was equal to 14 sq. ft. and that the 10 additional skids he had just purchased amounted to 140 sq. ft. of space dedicated to inventory at a monthly cost of $1,120.

Realizing that his savings from buying in bulk was easily eclipsed by the cost of storing the pallets of boxes. Following the recommendations of a friend, Paolo contacted Racer Boxes – a Vancouver Boxes and Packaging Manufacturer and began a through consultation with them began receiving weekly deliveries. Through this reduction in box inventory, he was able to free up 100 sq. ft. of room in his factory and with a recalibration of his factories layout, Paolo was able to free up enough space for his new machinery to turn that square footage from a loss into positive revenue generation.