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San Diego
Friday, September 24, 2021

INVENTORY MANAGEMENT SOLUTION (REDUCTION IN PARTS & COST)

A U.S. information technology service company with more than $350 million in annual sales. Stores and manages 80,000 parts in 98,000 sq ft of space spread over 128 warehouses managed by 41 employees. There was no reliance on any 3rd party for stock control and the technology used to support part supply and inventory management was inadequate.

Initially conducted a comprehensive evaluation of current inventory management structure. Analyzed in-house distribution locations, number of SKUs and parts, part turnover, and total inventory management cost. In addition, attention was paid to third party stocking locations, number of SKUs, number of parts, and necessity of parts vs. SLA. The process for procurement, disposal, field stock allocation, shipping, van stock allocation, and replenishment was also examined. An assessment of the current in-place technology to support inventory management was completed and the following plan recommendations were implemented:

  • Reduce Number Of Parts From 80,000 To 23,000 And Recycled Remainder, As These Parts Are Not Necessary For Client SLA Commitments.
  • Close In House Stock Locations And Outsource To Third Party.
  • Deploy Critical Inventory To 151 Locations To Meet SLA Commitments
  • Propose And Integrate New Inventory Management Software

Implemented recommendations improved operations and achieved $600K in annual savings and reductions. Parts inventory was readily available at appropriate locations and service improved.

 

 

HUB MANAGER’S TRAINING WORKSHOP

Developed, managed and instructed a very successful hub training workshop program for SF Express. We trained 220 hub managers and 102 hub Industrial Engineers in 25 workshops. The primary focus was in training both groups in hub planning using a scientific management approach, as compared to experience being the primary management approach.

Our role comprised of:

  • Project Management And Coordination
  • Workshop Content Development
  • Workshop Structure Development, Tools, Instructors And Participant Manuals Development
  • Training Of Instructors
  • Lead Instructors In All Workshops
  • Follow Up On Commitments From Students
  • Analysis Of Results

The results were excellent in all areas; productivity, service and cost. As more students attended the workshops, productivity increased steadily, showing a 40% increase over one year.

 

We also compared the KPI results in cost and service for those hub managers that had attended the workshops versus those that had not. In all categories, there was a significant difference in results for those that had attended the workshops and those that had not. This ranged from 15% to 30% better results in both cost and service KPI’s. Below are two examples, missorts and bad handling.

Managers that had training were 16% better in achieving low cost and low missort rate than those that had no training.