Executive Summary
Increased flexibility in the supply chain, an optimized inventory management system and more efficient minimum order quantities helped this global power systems automation company improve delivery times and reduce lead time dollar drive.
The Company
A global $1.6B company specializing in creating digital products and systems that protect, control, and automate power systems around the world. The company has over 6,500 employees and 100 offices globally.
The Challenge
The customer required a high degree of flexibility to support 5- to 10-day lead times to their end-customers. Additionally, there were challenges with unfavorable on-time delivery (OTD) due to order release and invoice timing, excessive minimum order quantity mismatches leading to unnecessary repacking requirements and the need for accurate forecasting.
Solution
In concluding the assessment five key initiatives were identified to achieve the greatest short-term impact:
- Improve forecasting accuracy with monthly review
- Streamline order processing
- Optimized inventory management
- Eliminate repackaging by converting minimum order quantities to standard packaging
- Added a value-added code to improve invoice timing
Results
- Redesigned re-order point calculation reduced lead time dollar drive by $2M+
- Over 1,100 components on supply chain programs
- Eliminated unnecessary repacking for hundreds of shipments