Late customer deliveries, repeated expedites, lost sales
High inventory levels, obsolescence, excessive operating costs
Lack of control and excessive overhead to plan and buy material
Costs Related to poor Supply Chain Planning and Execution
Cost of capital
Obsolescence
Deterioration and loss
Devaluation risk
Overtime
Unplanned changeovers
Product returns
Expedited transport
Handling and storage
Taxes and insurance
Typical Results
Our clients typically experience the following improvements:
Reduction in Inventory of 10% to 40%
Increased Service Level by 5% to 15%
Payback time is usually less than 6 months
Benefits to our Clients
Complete a full supply chain segmentation for demand, supply, materials, and contraints
Evaluate and clean you ERP system confirmation
Define and implement an improvement process and software in as little as 6 weeks
Align your operating plans and execution to your business model and goals
Minimize the inventory investment while maximizing customer service levels and productivity
Improved Service Levels and Productivity
Revenue growth due to increased customer service levels. Reduction of lost sales due to improved material availability and backorders
Productivity improvements and reduction of costs directly related to product availability: Expedited freight, overtime, costly changeovers, supplier expedite fees
Reduction of Inventory
Reduction of the cost of holding inventory:
Cost of capital, obsolescence, deterioration and loss, devaluation, returns, transportation, handling, storage, taxes, insurance
Reduction of working capital requirements (one time free cash)
How do I quantify the benefits of an integrated supply chain planning and execution process?
Operating Expenses
1. Reduction of expedited freight and unplanned changeovers / setups 2. Minimization of overhead costs required to plan and execute across all functions 3. Optimization of warehouse space and material handling
Inventory and Working Capital
1. One time cash inflow for the total value of the reduction. This cash can be used to buy equipment, invest in product development, acquisitions or dividends to owners 2. A recurring cost savings for the amount of inventory reduced multiplied by the inventory holding cost rate (usually 20% to 25%)
Customer Service and Material Availability
1. Increase in delivery performance protect/increases sales and therefore market share 2. Improve raw material and component availability
