Insights

Our client was a manufacturing company thats specialized in manufacturing peforated sheets, mesh items, gratings and stanshions which are used in variety of indutrial applications. They had two major issues: first their whole inventory planning was based in min/max system. Second there was no inventory planning process in place. After merger of two companies they were dealing with thousands of SKUs. We tasked ourselves to analyze inventory utlization through stock turns. It became evident that not all items are the same and we segregated high moving items from slow moving items and develped S&OP process starting from demand plan based in seperate forecasting model. For high moving, made to stock items, we developed purchase plan model based on baseline forecast, inventory position,inbound stock and containerization constrained where as for low turning items, strategic decision was made in consultation with manufacturing team and turned their status to made-to-order. By involving state manager's input, we enhanced inventory performnace drastically. Our measures resulted in net savings of AUD 11 millions in two years. Better stock predictably increased the stock turn from 2.1 to 3.2 in just two years