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Inventory Management for World Class Production

  • By faber
  • October 18, 2019

Did you know, one of the world’s largest manufacturers and suppliers of machinery used in agriculture, construction, and forestry was able to reduce delivery lead time by 38% by implementing Inventory optimization tools?

The organization has a diverse product range, which includes heavy machinery and industrial equipment which is made by order. Retail activities are highly seasonal, with the majority of sales occurring between the months of March and July.

But the organization had longer lead time. which made them come up with a statement that they want to build their business just as good as their products. To improve its supply chain and Inventory Management, they implemented a few tools.

Increase Production through Inventory Management

The company divided the implementation journey into five stages. Each focusing on a six-month period. Each new project would begin on the lessons learned and the success of the preceding one.

In the beginning, the focus was on setting a multi-stage distribution network. To reduce the order lead time, the organization divided staging inventory into 3 locations. at the factory warehouses, at intermediate sites called merge centers, and at the dealers. The merge centers hold high-volume, non-configurable products. They are closer to the dealers to make sure they do not run out of stock whenever required and to ensure delivery within 1-2 days.

Later, it focused on enhancing shipments into cost-saving, multi-stop truckloads. Dealers’ assigned shipping days could be reduced because less volume was flowing from the factory warehouses. After the completion of the implementation stage, the project had shown a substantial saving of $2.7 million and the delivery lead time was reduced by approximately 38% for 89% of the shipments.    

Inventory management can improve your supply chain and optimize inventory, reduce lead time, and much more. So, have you reaped the benefits of implementing inventory management tools at Faber Infinite.