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Manufacturing & Distribution

NEEDS-BASED RESULTS

 

Manufacturing & Distribution

SITUATION

Leading manufacturer and distributor of construction products experienced a dramatic downturn due to the recession and needed a sharp reduction in inventory levels.

DRIVER GOAL

  • Reduce current by $9.4 million, from current level of $36.2 million.

RESULT

  • Identified $17.5 million in inventory reductions and implemented a burn-off plan.
case study image, CS-228 large

Case Study

Improve process excellence and asset utilization

Issue

A leading manufacturer and distributor of products used in North American public infrastructure, nonresidential and residential construction industries experienced a dramatic volume downturn due to the recession (2007 – 2009). Finished goods inventory levels had skyrocketed and represented a major opportunity to reduce costs. The Highland Group was hired to reduce current inventory levels and create and implement volume forecasting and planning processes and tools to better manage production. The client also requested a management system to maximize the benefits of the new processes and tools.

Highland Approach

The Highland Group analyzed sales history by month to understand sales trends by family, item, seasonality and location, created data models and then established rules and cost-effective inventory levels for each family group. The team also formalized and documented forecasting, demand planning, customer service and inventory policies.

Actions Taken

  • Established an inventory requirement forecasting process.
  • Formalized an inventory and customer service policy setting decision process.
  • Developed a sales forecast model with both historical and market input with the mechanics to measure actual results.
  • Developed a consolidated sales history, pending and forecast data model.
  • Formalized the sales demand management decision process.
  • Brought together inventory planning and sales forecasting to create/upgrade the demand planning MATRIX tool.
  • Implemented a pilot process and established metrics for service level performance and cost.
  • Trained demand planning process stakeholders.
  • Established service and inventory policies and levels.
  • Implemented a System For Managing to link all levels of the organization to the high-level Driver Goals, track key metrics and engage everyone in the company’s pursuit of process excellence.

Identified inventory reductions of over

$17m

by implementing formal sales and demand forecast tools & processes

Related Information

Project Leader

Manufacturing & Industrial

Joseph is a senior executive with more than 40 years of international industry management and consulting experience, primarily in the areas of process improvement, working capital optimization and operational metrics. Having served in more than 21 countries around Latin America, the Caribbean, the Pacific Rim, and North America, Joseph is skilled at implementing successful and sustainable change programs in culturally diverse environments.

Presenting Analyst

John is a Senior Executive and Presenting Analyst at The Highland Group with more than 30 years of leadership experience in management consulting. He has led hundreds of global consulting engagements that delivered an array of operational improvement solutions with total client benefits exceeding $1 billion dollars.

Client Partner

Financial Services, Marketing & Consumer Products

Petrina is a creative, hands-on executive with over 25 years of international business experience with a proven track record of working collaboratively across traditional boundaries and solving complex operational issues. She previously served at the senior executive level of one of North America’s leading financial institutions and several global consulting organizations. There, she led engagements serving industry-leading clients in United States, Canada, England, Germany, Austria, Switzerland, Norway and the Netherlands.

Project Leader

Sales, Marketing & Consumer Products

North America

Bill is a senior project leader with more than 20 years of hands-on experience in assisting multinational companies by deploying his expertise in Lean Six Sigma and Business Process Management tools, tactics and strategies. He has deep expertise in sales and marketing improvement, supply chain optimization, fixed-cost reduction, channel management, total production management, balanced scorecards and post-merger integration.