INVENTORY
MANAGEMENT Problem: Poor customer service (30% fill rate.) High
Inventory (6 months supply at 17 locations.) Solution: Move safety stock to central factory warehouse
location. Results: Customer service improved to 95%. Inventory
reduced to 1.5 months supply.
PURCHASING
EFFECTIVENESS Problem: Company using nonstandard material that
cost $2 million per year. Solution: Located and implemented a standard specification
material to serve the same purpose without reducing quality. Results: Reduced cost of material by 15% which increased
profits by $300,000.
OPERATIONS
ANALYSIS Problem: Long lead-time (2-3 months), low market
share (15%). Solution: Improved internal materials and information
flow and supplier interface processes. Results: Lead-time reduced to 1-2 weeks, market share
increased to 80%.
TRANSPORTATION Problem: Changing customer requirements resulted
in company with $8 million freight expense, poor customer
service and no resources to manage the process. Solution: Designed freight management system, including
EDI, carrier auto-pay and an “on-site” carrier representative
to manage the process. Results: Company providing high level of customer
service, while effectively managing the process and saving
20% on freight costs ($1.5 million per year).
