Releasing working capital without cutting service
Every echelon held a full safety buffer sized against the same demand variability, so the network was paying for the same protection three times.
- Modeled working capital release
- 9 to 13%At held or improved service level across tested segments
- Buffer duplication removed
- 2 of 3 echelonsFor the majority of item families in scope
- Parameter refresh
- QuarterlyOwned internally with a documented process
The situation
Safety stock was calculated independently at plant, regional, and local levels using the same variability inputs.
The catalog showed simultaneous excess and stockout, a classic signature of misplaced rather than insufficient inventory.
Supplier lead times in the master data had not been refreshed against actual receipts in several years.
What we did
- 1
Mined actual received lead times from purchase order history and refit the distributions, which materially changed the targets.
- 2
Built a guaranteed service multi-echelon model to decide which echelon should hold buffer for each item family.
- 3
Set service targets from stockout cost against holding cost by segment rather than one uniform company target.
- 4
Defined a quarterly parameter refresh process with a named owner before the engagement closed.
Other engagements
All work- Network Design
Consolidating a nine site distribution footprint
A network that had grown by acquisition was carrying duplicate coverage in three regions. Optimization showed the footprint could contract without losing next day reach.
- Simulation
Sizing an automation investment before signing
A vendor proposal promised throughput that the demand profile never actually required, and understated the staffing needed on the days that mattered.
- Forecasting
Forecasting a long tail service parts catalog
Exponential smoothing was being applied uniformly to a catalog where most items moved a handful of times a year, producing confident forecasts of zero.