Case Study on Inventory Control

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Case Study on Inventory Control

By | October 2009
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Case study:
Manufacturing
Supply Chain Logistics & Inventory Control
A specialty chemical company with worldwide operations serving the electronics, surface finishing, and decorative industries engaged Daniel Penn Associates to improve its supply chain logistics and inventory control systems. At the time, the company had 14 manufacturing site, six R&D facilities, sales, and distribution centers worldwide and employs 1,300 people. In their efforts to reduce finished goods inventories and expenses while improving customer service, the company wanted to determine how they could reduce the number of warehouse facilities and service their customers based from fewer locations in North America. At the time, products were manufactured from four facilities and distributed through 22 distribution centers, of which 16 were public warehouses and six were company-owned. Initially, DPA visited with senior managers to define the study objectives in the areas of distribution management and inventory control. In a nutshell, our analysis was geared to answer three main questions: After thorough evaluations by our consulting team, interviews with all levels of management, analysis, and customer service reviews, we determined the study culminated in a detailed implementation plan outlining the steps for consolidation and optimization the distribution system. The corrective actions identified included: The direct bottom line results to the company included a 35% decrease in freight to public warehouse costs and 35% decrease in public warehouse costs. Inventory control is the implementation of management's inventory policies in a manner that assures that the goals of inventory management are met. Wise control of inventory is often a critical factor in the success of businesses in which inventories are significant. The goal of inventory control is to be sure that optimum levels of inventories are available, that there are minimal stockouts (i.e., running out of...
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