Inventory Optimisation for Industrial Manufacturers

Supply Chain challenges in the industrial sector

As the Industrial sector enters a time of considerable uncertainty, driving efficiency and profitability within the business has never been so challenging. Consumer appetite for new features, lower costs, higher quality and shorter lead times are magnifying the problems of less responsive and longer supply chains caused by the need to move the supply base offshore.

To respond to these increased supply chain challenges and maintain market share, companies must quickly adapt to these changes to become more efficient. Industrial manufacturers who recognise this volatility and the importance of meeting tomorrow's challenges are rapidly re-engineering their businesses - but their new look businesses require different management and planning techniques.

The traditional business practices, therefore, are being challenged, proven processes are being questioned. The goal is to increase operational efficiency and many businesses will need to adapt or risk losing out as the industry is shaken up.

Industrial supply chains, however, are often very complex and diverse, creating a mandate for companies to:

  • Improve stock holding policies in the shakeup of their businesses;
  • Reduce inventory levels and therefore associated holding costs;
  • Increase stock turns;
  • Ensure warehousing space is providing the optimum level of efficiency and that stock of positioned to provide maximum availability;
  • Improve stock visibility throughout the supply chain and
    Consistently meet service performance in line with customer expectation.

The solution to meeting these needs versus the cost challenge lies in controlling the day to day replenishment of those line items which make up your product range.

Internal inventory management challenges

There are many challenges that will affect staff working within the Industrial Manufacturing Market, none more so, than the Inventory Manager. Their role has never been more important to a company's survival than today and their challenges must be met and addressed head on.

Inventory Management challenges and therefore changes needed include:

  • The transformation of internal replenishment processes as the business evolves;
  • The management of multiple branches and predict sales 3 - 6 months into the future;
  • The development of a complete and unambiguous visibility of supply chain activity through improved supplier collaboration;
  • The design and optimisation of transport networks to improve supply efficiencies needed to match service level demand;
  • The optimization of supply chains with very long lead times, to ensure availability is in line with contact requirements.

The unique appeal of the Optimiza software solution lies in our ability to enable organisations to integrate best-practice inventory management methodologies, using world class decision inventory planning software support tools and thus create and sustain inventory optimisation throughout the supply chain.

Optimiza software - the inventory management solution

Being able to scientifically model your supply chain to determine the optimal stock requirements for any given service level provides customers with unprecedented visibility of which inventory related processes are in support of the stock holding policies and those requiring some re-engineering.

Customer satisfaction

"Our objectives in making this investment were to improve our forecasting process and reduce inventory levels. We measured a reduction of more than 16% in stock levels over a representative period and an increase in availability of almost 4% in the same period.

We retained some in-house systems, for sales and purchase order processing, which are well embedded into our legacy systems and perform well. Integrating Optimiza into this environment was a relatively painless process: as was the implementation in general".

Andrew Robertson
European Logistics Controller, IMI Norgren, a subsidiary of IMI PLC

"I take great pleasure in going on record in recognition of the contribution made by Optimiza in assisting National Bolts to more than half of our overall investment in finished goods inventories while, at the same time, improving our service levels.

The inventory levels of finished goods were reduced from around R40m to approx R17m over a 12 month period. During this period our sales continued to increase. The introduction of the Optimiza methodology in the areas of Forecasting, Lead Time Management and Policy Setting, together with the Optimiza advanced modelling tools has played a central role in these achievements".

DJ Dedwith
Managing Director, National Bolts

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