National instrument products manufacturer, while performing well compared to benchmarks across most metrics continues to lag in relative levels of inventory investment.

Problems

  • Performance lagged industry benchmarks substantially in area of inventory investment
  • With tens of thousands of finished goods products plus a complex set of bill-of-material relationships the means to more precisely pin-point key areas of opportunity was both complex and challenging.

Focus:

  • Clarify potential inventory investment improvement opportunity
  • Distinguish level of opportunity related to finished goods inventory versus raw material and component parts inventory
  • Gain support and buy-in across client organization for the level of opportunity

Approach:

  • Core value performance performance measurement put in place
  • Developed means to determine target finished goods inventory while gaining buy-in to methods
  • Established means to determine demand and associated supply requirements for raw material and component parts while also gaining buy-in to methods

Result:

  • Solid understanding and buy-in to the problem as well as to the size of the opportunity achieved.
  • Visibility to the opportunity  now available at individual product level providing for tiering by supplier, product category and by buyer
  • Bill-of-material mapping provides greater visibility and understanding of linkage between components to finished goods products.
  • Pursuit of the clearly identified opportunity is now underway.  Stay tuned!

Inventory Opportunity Summarized by Product Value Categorization

Instrument Manufacturing

Visibility of Opportunity by Product Presented

instrument-manufacturer-6b

By | 2013-07-12T11:28:37+00:00 May 23rd, 2013|All Case Studies, Manufacturing|0 Comments