Inventory Optimisation

Optimise inventories and service levels

Today, Supply Chain managers often face contradicting requirements: While sales and distribution calls for almost hundred per cent security of supply, finance aims for a minimisation of the total inventory to reduce working capital. Thus, there is a conflict of objectives between achieving low inventory and keeping a high service level. However, often Supply Chains lack transparency of inventories which makes it difficult to initiate improvement measures.

Alternative Levers of Inventory Optimisation
Alternative Levers of Inventory Optimisation

A "one size fits all" approach and a lack of knowledge of differing customer demands lead to inefficient Supply Chain structures. Rapid organic growth, mergers and acquisitions are further reasons for a weak Supply Chain. They lead to parallel structures and potential synergies remain unrealised.

Identify the levers for working capital reduction

J&M supports Supply Chain managers to find the optimal inventory and service levels. To achieve this, we apply methods that are proven in practice such as inventory segmentation, software supported network optimisation and determination of the Supply Chain degree of maturity, and adjust them to the specific requirements of our clients. Our consulting portfolio for inventory and service level optimisation includes:

  • Inventory analysis to identify the suitable levers and estimate the optimisation potential
  • Review of the existing and design of the future distribution and production network
  • Installation and establishing of an integrated planning environment – from sales planning to supplier collaboration for customer oriented segmentation
  • Optimisation of inventory planning parameters
  • Dynamic safety stock optimisation

The goal is to find the right mix of levers to reduce the working capital tied up in inventory and sustainably reduce the costs without neglecting the service level. Internal and external replenishment times can be reduced while planning efficiency can be increased.

Optimise inventory and service level with our integrated approach

A holistic consideration of the Supply Chain helps to reduce inventory costs while increasing the service level at the same time. For our clients, we develop a targeted road map for the implementation. J&M has successfully supported its clients in inventory and service level optimisation and created added value:

  • Reduction of inventory of finished goods, components and raw materials by 20-40 % through the optimisation of inventory parameters
  • Improvement of ability to deliver by 5-10 % at the same or a lower inventory level through segmentation of Supply Chain planning
  • Reduction of transportation and logistics costs by 10 % through optimisation of distribution locations
  • Increase of the order fulfilment rate and timely deliveries by 5-10 % through network optimisation
  • Reduction of planning effort by automated and reliable processes
'The implementation of the concept has delivered slim processes which match our requirements. We are therefore now in a position to increase supply performance and simultaneously reduce costs.'

Marcel Bühlmann, CEO

Midor AG

'Dynamic safety stock planning enables us to pinpoint the ideal cost balance between the requirements of capacity utilisation, stock levels and service level – factors which can sometimes conflict. In addition, our schedulers can now pay more attention to the strategic development of the supply chain.'

Bruno Kulmus, Head of Production and Technology

Griesson - de Beukelaer GmbH & Co. KG

'The well-founded development, assessment and selection of supply chain scenarios gave us a sense of confidence that we are pushing forward in the right direction and are optimally set up for the future ahead.'

Heinrich Becker, Head of European Logistics Management

Hilti AG