Background

The client required analysis of its inventory position and a review of its inventory and performance management processes. The goal was to achieve immediate  and sustainable service level improvement within a resource constrained environment.

Challenge

• Limited accountability for the performance of a supply chain of which the Client had very limited control (pull v push processes).
• Working within a heavily bureaucratic system that imposes significant administrative time to total Lead Time.
• The need to introduce forecasting to facilitate collaboration with suppliers who have capacity limitations in their manufacturing and significant lead times in their procurement of raw materials.

Approach

A multi-phase project was commissioned aimed at  identifying, implementing and realising the benefits in the following streams :

• Data quality and maintenance
  • Worked with the Client to remediate incorrect data/parameter settings and created online queries for ongoing self-maintenance.
• Workload reduction

• Automated input of forecasting data and output of replenishment requirements, including size distribution, in accordance with core customer segmentation
• Definition, documentation and implementation of processes, procedures and measures
  • Demand and replenishment planning based on history and market intelligence
  • Performance management covering process compliance, workload management and achieved outcomes.
• Staff professionalisation
  • Collective and individual training of staff covering supply chain theory, financial planning (including cost attribution) and process execution
• Supplier collaboration
  • Vendor-based procurement schedules over 24 month periods.

Outcome

• Achieved 70% reduction in understocked inventory and an 85% increase in balanced inventory.
• Improved DIFOT performance from 90% to 96% with a 340% increase in transaction volume and a 28% reduction in the annual operating budget.
• Standardisation of processes and robustness in process execution that are outcome orientated.
• The implementation of phased supplier deliveries are expected to reduce wholesale warehousing  by up to 56%.