Approach
In order to get a clear view on the situation, Möbius executed an intensive audit, both interviewing key players in the stock management process and analysing the current planning system. This audit resulted in an action plan, structured around three tracks:
- Improve inventory accuracy: Through weekly stock count of a subset of items, root causes of inventory inaccuracies were revealed. To address these an action plan was implemented.
- Update the calculation model for stock targets (what is a realistic target?): The existing model was adapted to include the required buffer in empty cylinders and bundles to cover differences between the demand for full cylinders at the one hand and empty cylinders returned at the other hand.
- Start rebalancing and lowering inventories: The realistic inventory target, resulting from the updated model, was compared to the corrected stock data on SKU level in the ERP system. In order to correct the imbalance, one type of cylinders needed to be converted into another. This happens in retesting centers, which requires time and comes at a cost.
Result
The collaboration with Möbius has led to the following concrete results:
- Potential revealed through audit:
- The overall stock could be reduced with 51%, hiding significant imbalances: some items required an inventory increase while other items required an even bigger reduction.
- Stock accuracy between 40-70%, with 90% as a benchmark minimum.
- Improve inventory accuracy:
- Reach 90% minimum benchmark in 3 months.
- Sustain continuous improvement to reach 95% by the end of year one.
- Updated model for calculation of stock parameters:
- Updated calculation model available to central stock expert.
- Execution of inventory reduction plan:
- Central stock team working on rebalancing and reducing inventories with the anticipated 51%.
