|
Operational Transformation-154
The Situation:
Tier One supplier in the auto industry, with eleven manufacturing facilities, was not meeting customer requirements regarding part/component availability and ship times. As a result inventory and distribution costs had risen significantly and, in an effort to meet customer demand, quality control standards were no longer followed. The Highland Group was asked to assist them with demand visibility and supply chain planning, operations performance and reliability, and sourcing performance and reliability.
The Driver Goal:
- Reduce plant inventories by 5%
- Reduce Distribution Center labor costs by 5% as a percent of sales
Actions Taken:
- Developed and implemented a supply chain System for Managing for monitoring orders and inventories
- Implemented revised safety stock rules, narrowed shipping windows/transit times, and increased order frequencies
- Developed and implemented eleven plant specific Systems for Managing orders and production
- Developed and initiated “competitive supplier” programs for lead time reduction
- Re-engineers the Distribution Center processes and re-established quality control practices
- Developed and implemented a demand driven Distribution Center staffing model
The Results:
- Reduced plant inventories by 9%
- Reduced Distribution Center labor cost by 5% as a percent of sales
|
