Inventory optimisation in the face of uneven customer demand
The overriding goal of many companies is to provide the highest level of customer service while avoiding excessive inventory for cost reasons. Find out how to reconcile all this in our suceess story.
inloop Service
Strategy/Supply Chain Assessment
Industry
FMCG
Location
Hungary (Headquarters)
Our client is a leading company in the Fast-Moving Consumer Goods (FMCG) industry which manufactures branded and private label products for the retail sector. Headquartered in Hungary, it operates in ten European countries with twelve plants. This network enables efficient delivery to over 400 customers in 40 countries.
High service levels and the best price-performance ratio among private label manufacturers in its sector are our client’s hallmarks. This creates partnerships with the leading European supermarkets. To further expand this market advantage, our client is working on continuous improvement.
Challenges
The FMCG industry is very much driven by promotions. The requirements of customers from different countries diverge. While orders from large supermarket chains are handled through existing contracts, smaller retailers rely on e-commerce solutions. In order to avoid high, cost-intensive inventories and a deterioration in delivery standard to individual customers, a differentiated view of production, inventory and delivery strategy is needed, based on the requirements of individual customer groups.
Project
The company’s current situation was evaluated through expert interviews and in joint workshops. Our analyses were carried out in the areas of planning processes, application of supply chain software, and inventory management as well as in the overall use of KPIs. Based on this, the potential for improvement was identified, and individual action packages put together and implemented in the respective organisational units of the company.
The group-wide use of the planning software and the use of the resulting reports in IBP meetings contribute to reducing complexity. Ongoing inventory management in the form of segmentation, as well as structuring and monitoring, now enables increased performance where previously unused potential was untapped.
Results at a glance
- Redesigned IBP process
- Increased customer service level
- Optimised inventory
- Cross-functional overview of supply chain
- Standardised KPI cockpit
- Visibility of capacity bottlenecks
- Transparent cash flow planning
- Reduction of obsolete stock (e.g. due to reaching best-before date)
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