European Multi-Warehouse Manufacturer
Inventory Excellence
A highly successful programme to gain control and efficiently deploy working capital within the European arm of multi-national OTC / pharma manufacturer. 30+ warehouses, a network of own and 3rd party manufacturers, seasonal shelf life constrained product ranges all combined with long lead times and segmented SKU management. Year 1 saving of over 10% (tbc) of inventory, with further refinement and control following. Significant insights on forecast performance and supplier MOQ impacts are also being identified.
Problem
- A combination of multiple ERP systems, high supply error and lack of visibility meant the client had a focus to reduce inventory
- IO was under review and then delayed, but working capital was still high priority
- The client wanted a robust way of reducing inventory whilst maintaining service
Solution
- Proof of Concept: OnTarget was configured for a test project, focused on specific markets and product categories was initiated
- Rapid insights: the 2-month project identified significant saving opportunities of over €5m
- Full European Implementation: Overcoming a series of data challenges and a changing priority set, the full implementation of OnTarget was completed late last year
- Initial Review: Using novel approaches such as mathematical rules on auto-approvals, the majority of the SKUs have had an initial review
- User training: Expertise is being enhanced with full training and support from Sequoia
Impact
- PoC SKUs: Immediate implementation of PoC recommendations reduced inventory holding in 2024
- Projected Benefits: The work is ongoing but despite exceptionally long lead times, the projected inventory saving this year is in the region of €30m. Additional benefits will also flow from Supply Chain visibility
- Component Stock: Client is currently assessing opportunities to work on component stock
