ARE YOUR INVENTORY LEVELS OPTIMIZED?
The Client is a producer of hearing aid products. It distributes throughout Canada. Significant growth is anticipated over the next 3 years.
The Client recognized that it needed to improve its inventory management practices including inventory control, forecasting, inventory planning, and procurement practices.
SCS was retained to review current practices & procedures, technology employed, and to comment on aptitudes, skillsets, and role descriptions that would be appropriate for inventory management positions.
The SCS team completed an accelerated diagnostic of detailed inventory management practices. The diagnostic included reviews of current processes, people, & technology. Current practices were compared to industry best practices. Included in the scope were forecasting, inventory control, sku classification, replenishment, lead time, inventory levels, and associated measurements.
Opportunities were identified and categorized by ROI probability, ease of implementation, capital expenditures required, and interdependencies/pre-requisites. Finally, a report was created that provided a summary of the findings, established a list of priorities for implementation, and a high-level implementation plan.
The diagnostic was reviewed with executives to confirm the priorities. All suggestions were agreed to and the Client is now in the midst of implementation.
The solution lay in:
- more appropriately classifying sku’s and determining required inventory levels based on prioritization
- documenting technical and soft skills required in order to effectively manage inventory functions
- educating senior management in the principles of inventory management so as to more objectively determining investment requirements and fill rate targets
The client has begun implementation of all SCS recommendations. Anticipated inventory reductions are in the 25-50% range.