LAN Chile had dedicated a whole team internally, specifically devoted to the resolution of daily issues caused by the complexity involved in their supply chain management for onboard services. Moreover, their warehousing and distribution budget was also increasing every year, penalizing the ability to invest in their expansion plans. Altogether, the above situation and the heavy workload originated by the maintenance of a strict control mechanism necessary to guarantee efficiency and optimum cost was distracting LAN and impeding achievement of their strategic goals.

1. Elimination of distractions to allow LAN to achieve its growth plans.
2. Optimization of cost and usage of resources across the network
3. Standardization of best practices and control mechanisms
4. Sustainability and flexibility of the model according to expansion plan

Pourshins mapped out LAN’s existing supply chain model and identified a number of improvement opportunities through the outsourcing of all those resources dedicated by LAN to manage its supply chain.
Among other opportunities, Pourshins identified three key challenges:
- Warehousing and distribution cost via LAN’s own premises and cargo, respectively
- Staff productivity and ability to concentrate on core business
- Lack of visibility and control of the stocks across the network and ability to make strategic decisions

LAN decided to implement a fully integrated Pourshins’ asset management program by late 2007. In the first two years, Pourshins has reduced significantly LAN’s supply chain management cost for equipment compared to its former situation. The main savings have come from

1. Optimization of the warehousing space
2. Optimization of quantities purchased and consumed
3. Reduction in usage of LAN’s own cargo space and fuel consumption
4. Ability to free up human resources formerly dedicated to these tasks

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