Benchmarks & Client Cases

Bought-in Part Planning  

The Challenge


stock-coverage-lead-time 

Problem


• Average stock coverage of 67 days, with average supplier Lead Time of 31 days

• £18.1m worth of inventory held in stock due to inconsistent deliveries by the supplier

• 4000 pallets stored in the warehouse



Root Causes


• Lack of frequent KPI tracking: stock value, stock coverage or supplier Lead Time

• Component ordering based on forecasts with low accuracy

• No repercussions for suppliers who fail to comply with service level agreements

The Solution

meetings-standards

• Implementation of Periodic ABC Classification (frequency and volume) to identify Material Requirement Planning and Reorder Point articles

• Reorder Point Pilot Tool in Excel to validate the concept

• Renegotiation of supplier contracts: Lead Times, frequency of delivery, minimum order quantity, consignment and packaging

• Pull Planning Manual and Standardisation of planning processes

• Standard Reports to communicate with suppliers

The Results

The organisation was able to free more than £2.3 million in Cashflow.


Average Stock Coverage

Average Stock Coverage

Stock coverage reduced by 20%



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