Inventory Management

Context

Industrial/Business: The project concerns the improvement of inventory management.

Problem: Poor synchronization between physical and computer movements, lack of a clear inventory policy, inefficiencies in the preparation of parts, inaccurate inventories.

Diagnosis

Qualitative: Improve inventory management, optimize receiving and shipping processes, make stocks more reliable.

Quantitative: Reduce inventory by 20% and reduce stockouts by 70%.

Main axes of analysis of Dillygence

1. Warehouse activities: Mapping current processes, identifying bottlenecks and inefficiencies, estimating workload

2. Inventories: Auditing current inventory methods, identifying sources of errors and proposing new periodic and permanent inventory methods.

3. Bills of materials: Reviewing and updating product bills of materials to ensure their accuracy.

4. Dashboard: Developing key performance indicator (KPI) tracking tools to monitor inventory trends

Our Recomandation

1. Decrement of BOMs: Reduce the time between the issue of parts and the issue of stocks via BOMs, while waiting for the implementation of an effective MRP calculation.

2. Inventory process: Implementation of a systematic inventory at each part pick and rotating inventories for better accuracy.

3. Inventory policy: determination of the best method of managing stocks of production parts and determination of supply thresholds in order to minimize the risk of errors.

Our Solutions

Following the diagnosis, a total of 17 actions were identified to boost the factory’s performance. 3 out of these 17 actions were qualified as essential, as their potential impact relative to their costs of implementation (in terms of investment and change management) were the most promising. 

A general transformation roadmap was produced, and several workshops were conducted to refine the target and intermediate stages on the 3 most promising actions for performance improvement. The refining process involved both Dillygence’s Lean expertise, and the operational expertise of client’s project leaders and key stakeholders on these particular issues. 

Benefits

Before: No meeting and no structured PDP process

Physical and IT movements are very out of sync

Significant overstocks.

After: Implementation of a weekly PDP meeting that allowed decisions to be made to speed up the manufacturing process

Evolution of the reception process to match incoming physical and IT movements

Reduction of non-production stocks by 12%, and not yet measurable on production stocks 1111