Unlocking the Power of Strategic Inventory Management - Case Study 1

Unlocking the Power of Strategic Inventory Management

In an era of volatile markets and increasing complexity, effective inventory management is no longer just an operational necessity, it's a strategic advantage.

This three-part case study article series delves into how Miebach helps organizations achieve an optimal inventory set-up and management, leveraging the power of digital tools, and proven processes:

1. Inventory Target Setting for a High-Tech Industrial Client: Unveiling strategies for setting SKU-specific inventory targets, balancing service levels, risks, and costs.
2. Optimizing Supply Chain Processes and Organizations with a Control Tower: Highlighting how a strong organizational framework and innovative digital tools like the Inventory Control Tower can transform inventory management and support end-to-end supply chain visibility.
3. Strategic Inventory Placement: A Retail Case Study with TCTS Models: Exploring advanced network strategies to ensure optimal stock placement and maximize efficiency.?

Join us as we dive into these essential topics, beginning with the first case study.

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?? Part 1: Inventory Target Setting for a High-Tech Industrial Client?

A high-tech manufacturing client operating in a volatile market faced a staggering increase in inventory value over two years. This led to simultaneous overstock and understock situations, creating inefficiencies and interdepartmental friction. Miebach was brought in to uncover the root causes, propose actionable solutions, and transition findings into measurable results.?

The Challenge: Understanding the Complexity

A high-tech manufacturer in a volatile market faced overstock and understock issues simultaneously, disrupting operations and frustrating customers. Departments were faced with inefficiencies, pointing fingers as problems were blamed on individuals instead of systemic flaws. The company’s complex, high-value SKU portfolio only amplified the issues. To improve the situation, Miebach stepped in with a clear mission: uncover the root causes, implement targeted solutions, and bring inventory under control without compromising service levels.

Our Approach: Data-Driven Insights for Tangible Results

Miebach’s approach centered on leveraging Data Mining techniques and introducing a Target Operating Model (TOM) to drive sustainable change. Key steps included:

• Root Cause Analysis: Identified systemic issues behind excess and insufficient inventory.
• Demand Variance and Promotion Analysis: Assessed inconsistencies in demand patterns and promotional impacts.
• Overstock Evaluation: Highlighted inefficiencies in order volumes due to crisis-driven adjustments.

Findings and Results: Transformed Challenges into Opportunities

The analysis revealed an overstock of 55%, with actionable insights driving targeted measures:

-??Operative Order Management (10-15%): Temporary supply shortage led to excessive ordering without corrective mechanisms.

-??Risk Management (20-25%): Inefficient stockpiling practices lacked system support for optimization.

-??High Demand Variance (20-25%): Manual demand forecasts resulted in low-visibility discrepancies.

Based on a detailed data mining, the introduction of a Target Operating Model enabled the company to not only reduce overstock but also built a sustainable framework for future inventory control.

Stay tuned for our next inventory case study article about how an Inventory Control Tower can transform inventory management.

If you have any questions or would like to get more information about the topic, please contact Christian Lütkemeyer .