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%



Are you interested in Kaizen Institute's consulting services?

We assist client teams in achieving great results by putting breakthrough paradigms into action.

Are you interested in Kaizen Institute's training courses?

Kaizen Institute's distinctive training programme includes learning the theory and practice and gemba visits.

arrow up