Executive Summary
Fluctuating demand due to customer mix and project sizes created simultaneous overages and component shortages for this global manufacturer of building automation and lighting systems. TTI supply chain analysis revealed that dynamic economic order quantity triggers, streamlined package labeling and automated material handling would result in more than €25,000 of annual savings for the customer.
The Company
A global 50+ year company developing and manufacturing custom electronic solutions in intelligent building and lighting technology, smart home applications, transportation, medical technology and more.
The Challenge
The customer was having difficulty anticipating and meeting the fluctuating demands of their customers and industry. This caused inventory misalignments resulting in overages and/or shortages. An excessive number of manual processes, both in purchasing and material handling, contributed further to the inflexible response time to their customers’ needs.
Solution
In concluding the assessment, five key initiatives were identified to achieve the greatest short-term impact:
- Minimize manual handling through increased automation
- Increased part availability through Just-in-Time replenishment, risk reduction and improved material flow dynamic reservation system to take advantage of a cost-sensitive market segment
- Instituted economic order quantities
Results
- Just-In-Time inventory system, reduced annual cost €15,000
- Annualized net savings of €10,000 from implemented automation