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