LORRAINE CONSULTING INC.

excess inventory: Supporting Annual Sales & Cost reduction

Overview

An aerospace component manufacturer experienced excess inventory and future projections highlighted further buildup.  Executives explored cost reduction strategies to lower capital.  Careful to avoid a negative impact to annual sales, we searched for an optimal solution.

The Objective

• Reduce net inventory
• Meet Customer Satisfaction goal of 95% OTD

Approach

Deep dive review into existing processes and implement detailed strategy

• Analyzed inventory accounts for reduction opportunities (Raw Materials, WIP, Finished Goods & Inventory Reserve)
• Suggested optimal inventory levels based on demand and customer safety stock requirements
• Targeted top inventory items for adjustments to MRP ordering policies
• Established automated control procedures and developed standard work

Results

• Inventory reduction of 10% in 12 months
• Sustained 95% On-time Delivery to customer base