Case Study / NZ manufacturer and exporter
The client had developed serious concerns around inventory management. They had issues with both excess inventory and sub-standard order fulfilment and needed to understand the drivers that contributed to the situation.
The scope of our initial review included:
Inventory management
Production planning
Sales and operations planning
SKU management
Managed finished goods inventory reductions to desired levels
Initial reduction of 12% in finished goods inventory
Further lead time reductions achieved a 20% decrease in finished goods inventory
Order fulfilment raised to target levels
Raw materials lead times were reduced
Our approach was to understand the gaps between current practice and best practice. LSI reviewed supply chain performance, supply planning, demand planning and order fulfilment against the overall strategic plan for the business.
This project entailed detailed analysis of current processes and practice and the identification of issues that contributed to excess inventory and poor order fulfilment. The end-to-end supply chain process was mapped and critiqued by stakeholders to determine the issues. Over 50 critiques were raised and summarised into key issues. These issues were classified into the following groups:
The review highlighted the ineffectiveness of the current forecasting and planning process. A number of key SKU’s did not have stock to complete the current months orders. Conversely, a number of SKU’s had stock for more than 3 months of orders.
Using up to date inventory and order information, we built a model for inventory, demonstrating the value of the stock required to meet order fulfilment standards.
To attain the Model Stock, we developed business rules around planning, implemented an S&OP program, and revised all SKUs to establish agreed levels.
Proven Success: Real-World Results from Our Clients
