demand planning optimization

CASE STUDY: Demand planning optimization

Industry:
Leading Building Components Manufacturer
Company Size:
2,000+
Project Location:
United States
Problem Statement:
After a period of substantial growth, our client received severe customer complaints due to declining OTIF (on-time in full) performance and an increasing finished goods backlog. 2 of their top 5 key accounts threatened to end the relationship, if the finished goods backlog would not be significantly reduced within a 2-4 months period.
STREAMLINERS’ Approach and Solution
Meeting:
Understand scale and impact of finished goods backlog
Deep Dive:
Root cause analysis revealed main drivers for backlog: no alignment between sales, planning, production and warehouse
Hypothesis:
Develop and implement SIOP (Sales, Inventory and Operations Planning) as a planning methodology and SIOP Loops as alignment routines among stakeholders
Project:
1 consultant
12 weeks
Deliverables:
SIOP and SIOP Loops implemented
Backlog reduced by 35% (end of project) and by 75% (4 months after project start)
Bottom Line Impact:
Both key accounts retained due to substantially improved OTIF performance
Order to cash cycle reduced
Inventory and working capital reduced

Root Cause Analysis

 

Fees vs. Bottom Line Impact