Challenge:
The manufacturer faced significant difficulties in managing their inventory, production capacity, and on-time shipment performance. More than 80% of their products were made to order, limiting their ability to carry finished goods inventory.
Raw material inventory turnover was low, with frequent write-offs due to shelf-life limitations. These issues created ripple effects throughout the business, resulting in missed customer commitments and suboptimal asset utilization. Growth aspirations were hindered by inefficiencies that affected reliability and scalability.
Strategic Objectives:
The leadership team outlined the following goals:
- Improve service levels, particularly on-time shipments.
- Increase turnover of raw material inventory while reducing spoilage and write-offs.
- Enhance asset and capacity utilization to enable scalable growth.
- Build foundational capabilities to exceed competitor performance in cost and service.
Approach:
Waypost initiated a hands-on assessment that included leadership and operational interviews, job shadowing, and review of business processes and tools. The focus was on three core areas: tactical supply chain planning, inventory management, and the SIOP process.
Key steps included:
- Mapping current state processes and decision-making workflows.
- Reviewing how teams interacted with the ERP system and data.
- Evaluating metrics, tools, and reports used to manage operations.
Assessment Areas:
- Tactical Supply Chain Planning (0–90 Days): Forecasting, inventory strategy, supply and production planning, capacity utilization.
- Inventory Management: System data integrity, physical count processes, control and reconciliation.
- Sales, Inventory & Operations Planning (SIOP): Demand and capacity projections, financial goal alignment, working capital forecasting.
Tools and Methodologies:
- A maturity assessment framework and Optimal Stocking Tool.
- Planning quality assessments, scheduling optimization reviews, and SIOP enhancements.
Deliverables:
- A “Better Practice” Roadmap highlighting the most valuable and timely opportunities.
- Standardized raw material and finished goods stocking policies.
- Enhanced SIOP process including better communication on NPI planning.
- RM catalog optimization and capacity projection tools.
Results:
The company was able to make significant strides in both service and inventory performance. Their initiatives led to better cross-functional collaboration and more reliable operations.
- Raw material inventory was reduced by 32%.
- Inventory turnover improved from 4.5 to 5.7.
- On-time shipment rates improved by 7%.
- Production scheduling enhancements created more available capacity to support growth.
- The business is now equipped with sustainable tools, decision frameworks, and cadence for continuous planning improvement.