Project Brief
Back to list"Pull-based" Inventory Replenishment Project
A Tier-1 manufacturer faced excess inventory at five plants and 23 warehouses. The vice president hired Systemental to work with a five-department team. He challenged the combined group to design a new Lean material replenishment system for scheduling, moving and stocking finished product throughout the firm's vast distribution network. Systemental led the process design effort and proposed an electronic kanban system. Pilot trials were conducted to confirm the effectiveness of the system design. Enthusiastic buy-in and the "Ok" from executive management followed.
After studying alternatives, including a new ERP module, the client's executive team selected Systemental to develop precision process-supporting software. The custom software was developed in phases using Systemental proprietary methods. The software was tested and refined in parallel with expanded deployment throughout the company's various business units and locations. This allowed for maximum real-world input and led to extremely accurate tool design.
The manufacturer now carries much less inventory and still meets its customers "just in time" requirements. The new software calculates and recommends inventory levels, and measures system performance. The company has freed up valuable floor space. Annual savings total $6 million. Employee participation and enthusiasm are very high. "Push" was replaced by a "pull system."
Summary
| Client | Major Midwestern Division of an International Wire Manufacturer |
|---|---|
| Problem | Excess inventory. Large orders and potential for late deliveries. Poor sales forecasts. Specialists controlled information on part movements and inventory. |
| Solution | Systemental detailed analysis of product movements between five factories, two forward stocking locations and 21 warehouses identified much opportunity for improvement. Process design followed by pilot trials demonstrated the effectiveness of a new approach. Systemental designed material management and reporting software to work in conjunction with the company’s ERP software. Impacts: reduced inventory, reduced waste, and improved manufacturing, warehousing and distribution, production planning, accounting, and IT. |
| Results | Annual savings: $6 million in lower inventory costs. Passed $100 million in inventory reduction. Turns have nearly doubled. Work assignments and tasks are visible. Five U.S. plants adopted Systemental's "pull" system followed by plants in Canada and China. Sales forecasts and customer satisfaction improve. Deliveries are on time. |
| Contact | Toll free 866-434-2040 |