Commercial Bakery
SITUATION
Large commercial bakery needed to improve on-time delivery to retail customers to retain them.
DRIVER GOAL
- Improve on-time complete customer order delivery, while reducing finished goods inventory levels.
RESULT
- Achieved 99% fill rate (up from mid 80’s).
- Achieved 97% on-time delivery.
- Reduced finished goods inventory by 33%.
Case Study
Rapidly Improve Customer Service While Reducing Inventory
Issue
The client, a large commercial bakery, needed to improve its ability to deliver complete orders on time to its retail customers in order to avoid performance penalties and/or lost business. The client had built excessive finished goods inventories in an effort to improve on-time performance, but slow-moving items became aged and performance did not improve.
Highland Approach
Following a thorough assessment of the current situation, The Highland Group concluded that Scheduling was not planning the correct SKUs and volumes to meet customer demand. Additionally, customer requirements were not well understood. Management needed to gain better control of schedules and manufacturing execution. There was no easy fix, nor would technology provide a solution. Success could only be achieved through rigorous application of basic fundamentals: understanding customer requirements, identifying order patterns and volumes, minimizing schedule variance and therefore overproduction of SKUs.
Actions Taken
The Highland Group partnered with client teams to develop and install new processes and systems that were focused on timely manufacture of the correct product.
- Installed an MABD (Must Arrive By Date) audit to insure that MABD met the criteria in the customer SLAs. Corrected 80% of the destination criteria to match SLAs.
- Production schedules were issued for 48 hours in advance instead of 7 days. This allowed for adjustments to the schedule while keeping the changes “invisible” to Manufacturing and reducing the likelihood of incorrect schedules circulating.
- Categorized and managed the inventory based on: Make to Stock, Make to Order or min/max.
- Implemented a daily review of the schedule status, which facilitated timely adjustment to maintain customer requirements.
