Stories
GLOBAL SUPPLY CHAIN REDESIGN
Global supply chain redesign
Challenge
The client is a global provider of equipment for mining and construction segment with a turnover of 150 MEUR that for a long time has suffered from long and unstable delivery lead times while having a lot of capital tied in stocks. They understood the importance of reducing both instability in the delivery process as well as the amount of slow-moving stock that were unnecessary kept on hand. A major hurdle for planning and executing any change was the vastness of the organisation, spread out over more than 50 countries and 6 continents.
Solution
To be more competitive both delivery performance and inventory management had to be improved. MYSIGMA introduced new methods for materials management and developed a method to differentiate target service levels and delivery lead times depending on SKU characteristics. Furthermore the clients stock network for both primary and local facilities were redesigned, which had the added benefit of introducing the client to new sourcing and planning possibilities that were more effective than their past practices.
Impact
The results of MYSIGMA’s activities led to some remarkable results.
- Reduced replenishment lead time with approximately 80 days for critical component groups
- Increased item service levels
- Reduced capital tied up with 50% equal to 14 MEUR
- Reduced purchasing cost of 9 MEUR
- Reduced cost for obsolete stock and cost for stock keeping with 1,5 MEUR