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.