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European Inventory Optimisation

The client

£500m division of £2bn FTSE 250 Group
Manufacturer and Supplier of pneumatic products
Global operator

The challenge

Inconsistent product availability despite excess inventory
Intensified global competition
Poor inter-warehouse stock visibility
Increased customer expectations in terms of availability
Introduction of Euro bringing downward price pressure

The solution

The Consultancy Company modelled the Inventory profile across a pilot range and sorted each product into groups that reflected variability of demand and thus the practicality of managing them to achieve a defined level of customer service.

In addition, supplier lead-times and performance were accessed and adjusted to reflect reality. The result was a common process that dynamically optimised the stock at each location and achieved the minimum level of stock required to meet the market-driven availability levels.

After a successful trial, the project was rolled out firstly across all the core items in the pilot countries and then by full implementation in a further 8 European countries.

Following the local optimisation of Inventory, we developed a process to identify where in the overall supply chain stock would best be located and to where the existing slow and non-moving stock could be re-deployed. This resulted in a significant consolidation project and reduced the stock holding by a further £1.5 million.

The Consultancy Company provided Supply Chain and Project Management expertise throughout the 3 year life of the project.

Benefits at a glance

  • 20% increase in Customer Service
  • Up to 25% reduction in stock holding
  • Opportunity identified to re-locate £1.5m of slow moving stock
  • Consolidated and streamlined Inventory Management process across Europe
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