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Improve Delivery Performance-130
The Situation:
A manufacturer of consumer products was faced with expanding cycle times, increasing inventory and increasing costs of promotional displays that accounted for $80 million in annual sales. The Highland Group was asked to improve customer service, reduce inventory, increase inventory turns, and develop and implement a process to manage the suppliers.
The Driver Goal:
- Improve customer service “Line item fill rates” to 96%
- Reduce obsolete inventory to near zero
- Reduce order lead time from more than 12 weeks to 8 weeks or less
- Reduce inventory turn from more than 40 days to 14 days in the distribution centers
- Transition from “make to forecast” to “make to order” system
Actions Taken:
- Instituted a Goal Roll Down and translation process
- Introduced a client process team that developed and implemented a new “make to order” process for promotional sales
- Initiated and implemented a client process team that designed and implemented a Management Operating System for promotional sales
- Put a reward and recognition process in place
- Created a client process team that developed a Barrier Identification and Removal process
- Coordinated changes in the Promotional Sales Process between client and suppliers
The Results:
- Achieved Line item fill rates of 97%
- Reduced obsolete inventory to 2%
- Reduced order lead time to 4 weeks on standard products and to 8 weeks on non-standard products
- Reduced inventory in distribution centers to 15 days
- Implemented new Management Operating System that is in place and being used by client and suppliers
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