Business problem:
- Inventory of Raw Material was very high
- Unpredictable changes in demand caused buying of extra raw material as the lead time is 1-2 months for procurement
Solution Approach:
- Process mapping – Understanding current steps of material procurement
- Studied the current raw material planning tools and methods used by material planners
- To find out alternatives to forecast material requirement long term (next 3 months) more accurately
- Find out gaps if any and look for alternatives to avoid extra inventory in short term (15 days)
- Implement new developed customized add-on excel tools.
- Systematic ordering using a production and procurement tool
- Optimum level has been computed using production level, BOM and policies related to stock in mind
Key Outcome and benefits:
- Inventory Cost savings: $700,000
- Reduced inventory levels by improved procurement process
