FMCG Drinks Manufacturer (Raw Materials)
Inventory Excellence
Global FMCG Drinks manufacturer with multiple sites, shared materials, long lead times and a risk of obsolescence. Exceptionally high service levels are required across all SKUS.
Problem
- An ERP system implementation had failed to deliver promised inventory reductions
- A solution was required that ensured visibility of adherence to targets and control of adopted target values
- Balancing obsolescence risk & Order quantities was key
Solution
- Site by Site implementation: OnTarget was configured for the raw materials across global sites
- Shelf Life & MOQ: determining the correct shelf life and MOQ values enabled the risk and cost of obsolescence to be quantified
- All In Approach: All SKUs (whether needing safety stock or being held in strategic quantities) are mandated to be uploaded to OnTarget to give the full view of the inventory position and accurately identify opportunities
- Automated approvals: Planner time is reduced by defining a set of rules (site by site) to automatically approve targets enabling the focus to be on SKUs which require greater refinement and understanding
Impact
- Service levels: The necessarily high service level of Raw Materials was maintained or improved
- Inventory Reduction: $60million/30% inventory reduction over 3 years
- Obsolescence Risk: reduced and quantifiable, enabling informed decision-making
- Additional: EOQ & EBQ trade-offs with procurement & manufacturing plus reduced vendor lead-times
