Strategic challenge
Founded in 1955, Hager Group is a leading supplier of solutions and services for electrical installations in residential, commercial and industrial buildings. Ranging from energy distribution through cable management and wiring accessories to building automation and security systems, its products are sold in 129 countries with a turnover of €1.9 billion in 2015.
Excellent product availability on a large product portfolio is a key success factor for Hager Group. The company now wanted to improve product availability with continuous improvement while also focusing efforts on inventory reduction. Therefore, Hager Group was looking for methodologies and tools to this effect.
Approach
Portfolio segmentation and targets setting
Creation of clusters with similar demand behavior and rule definition for replenishment strategy, service level and lot size.
Evaluation of supply and demand uncertainties, efficiency of current lot sizing rules.
Calculation of optimised inventory targets.
Process analysis and improvement recommendations
Maturity assessment of the main processes impacting inventory efficiency (Forecast, S&OP, DRP, MRP, Purchasing & replenishment).
KPI specification to measure inventory quality.
Supply Chain team training
Based on the model created in Step 1: training of Supply Chain planning team in principles and methods of inventory optimisation.
Development of specifications to define and utilise safety stock and anticipation stock targets in SAP.
Pilot on a limited number of SKU's
Test phase of the model (large enough to be significant but limited also in term of risk) to check impact of new methods and correct understanding of the teams.
Extension to entire portfolio
Extension of methods on larger product scope. Implementation of targets and calculation in SAP to allow stable deployment and secured utilisation.
Result
Results obtained on 15% of total portfolio
- OTD stabilisation and improvement of finished product DIO by 8%
Extension to total product portfolio
- In progress …
