Inventory Management and Sales and Operations Planning

The Background

Following a strategic distribution network review, a distributor of high end consumer goods rationalised its infrastructure from 13 to 4 locations

The organisation required an optimised inventory holding position for the new network, inclusive of inventory management policies, processes and procedures

The new network strategy encompassed a ‘multi-echelon’ inventory approach with the full range of products held at the National Distribution Centre (NDC) and rationalised inventory range holding at each of the three Regional Distribution Centres (RDC)

In addition, the organisation was also reviewing other key supply chain elements that would result in immediate improvement identification

How the Siecap team helped

Siecap team members used their design and diagnostic framework to review both the qualitative and quantitative aspects of the inventory management task

Included in the approach was the review of processes, policy, organisation, systems and performance metrics across the suppliers, internal operations and key customers

Inventory ranging and replenishment requirements were identified through the optimisation of safety, lot size and pipeline inventory, following an extensive SKU rationalisation program

The Results

A supporting Sales & Operations Planning structure to manage the appropriate New Product Introduction and Product Phase Out processes

Inventory management business rules to guide the Products Life Cycle process

A validated inventory management policy framework, documenting the optimised fulfilment and inventory ranging strategy for safety, lot size and pipeline inventory

A reduction in inventory holding by 16% (excluding removal of SLOB inventory)

An improvement in Order Fill Rate by 12% from a low 80% to 95% on average

Our Clients

We have delivered results for distinguished businesses and projects in Australia and abroad.