Reducing inventory costs with Global Sales & Operations Planning

The manufacturing company struggled on several fronts with a supply chain that did not live up to market expectations, was inefficient and costly. The key challenges were:

• Customers' expectations for fast and accurate deliveries had risen and customer loyalty had become more dependent on this than before.
• It was difficult to predict future needs for both new products and spare parts. This resulted, among other things, in inappropriately large inventories and significant differences in inventory across the various regions in which the company operates.
• On the internal lines, transparency was lacking across the entire supply chain, and it was difficult to ensure efficient overall reporting to form the basis for decisions and prioritizations.

The first step towards a solution was an analysis that uncovered the problem areas that the company was facing. The analysis indicated that there were significant differences in both work processes, tools and reporting across the various global units of the company.

The solution therefore consisted of both new processes for the employees involved as well as a number of new tools based on data - across all units in the international company. The newly developed tools, which among other things improve 'demand management' and inventory management, are based on both historical data and on continuous input from the employees who work in the supply chain.

At the same time, tools and processes form the basis for a new, efficient reporting structure that ensures transparency across the regions - and throughout the entire supply chain.

When all employees - across regions and functional areas - must follow the same work processes and use the same tools, the availability of the solution must necessarily be very high. This is ensured by implementing a web solution so that users can always access systems and processes.

However, the availability of a concrete IT-based solution does not provide much value if the employees do not use the system correctly and understand the connections. The project therefore also kept a sharp focus on change management rooted in the users' needs and culture and has thus also created the foundation for a strengthened, future collaboration across both geography and functional areas.

The unification of both overall flows, work processes and tools bring value on several levels:

• The implementation of the S&OP processes ensures unification and cooperation across regions and functions
• Transparency means that stocks are now balanced across regions
• The data-driven solution helps reduce inventories to optimal size, due to predictions based on historical data and modelling future market movements
• Customers experience that deliveries are more accurate and happen faster, because inventories are optimized, planning and forecasting is done across the regions and the order processes are efficient
• Employees now have a clear framework for their work, can exchange experiences with each other across regions and functions and at the same time contribute to improving the systems by continuously providing input from their daily work.

In short: The company now uses the many data to create increased efficiency, more satisfied customers and employees as well as reduced storage costs.

kaastrup|andersen was responsible for program management and change management in connection with the implementation of the solution.