New approach to inventory visibility creates focus on improved efficiency

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

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