Case Study

Background

A private equity group who acquired a custom drinkware designer and distributor needed a solution for an inventory management problem made tougher by product proliferation and weak S&OP. Sales had increased 50% each of the last 4 years but systems, tools, and discipline had not. Goods were delivered either directly into customer supply chains or through the warehouse for small customers. US designs were prototyped and produced in China. A warehouse excess inventory problem was aggravated by the desire for a large, completely new portfolio on an annual basis. This was coupled with lack of product line accountability for excess inventory, compounded by lack of data and costing rigor.

Solution

• Phase 1 of improvement included segmentation of product inventory to teams with associated metrics. Excess inventory was targeted for sell-off actions while the simple ERP system was strengthened with fields and tools to support these actions. Capability was added to improve inventory accuracy
• Phase 2 entailed developing inventory movement analysis techniques to drive proactive management of individual products and S&OP processes tuned to each market.

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