Inventory control by differentiation


Working capital management

Challenge

The client is an engineering multinational group in tooling, materials technology, mining and construction.

MYSIGMA’s task was to increase finished goods availability and reduce tied up capital. Product availability is a key success factor to defend their leading market position.

Solution

Based on a data driven pre-study, below changes were made:

  • Implemented new inventory control methodology.
  • Introduced a bypass supply line for large orders.
  • Suggested an improved product range control.
  • Training and implementation of the MYSIGMA methodology.

Impact

These changes then led to dual benefits, that we could both:

  • Increase service of low frequent items, from 93 to 95%.
  • Reduced tied up capital by 12%, made possible through eliminating over-complicated stock rules for high frequent items.