Inventory Cost
Program

A medium-sized company had to significantly improve its agility and cost structure in order to effectively meet the increasing competitive pressure in its global sales markets. Since its own production processes were already highly efficient, the company, together with ROI, focused on the supply chain and defined two directions: On the one hand, the processes in the supply chain should be optimized. The focus was on the use of total process cost as a basis for procurement decisions, the definition of a material group portfolio for process segmentation, interface reduction and the use of phase-in / phase-out support tools.

On the other hand, supplier integration should be deepened and supported by digital instruments. This was achieved by introducing web EDI systems and harmonizing data structures across companies in order to enable the consistent use of automated data and integrated controlling right up to plant management. At the same time, the warehouse was designed according to the VMI principle, geared to direct call-offs from manufacturing and the use of supplier data as input for scheduling, and combined with an integrated container concept. As a result, the company was able to reduce its inventories by more than 20%: an important contribution to hedging against volatile markets and fierce price competition.