Demand Planning and Inventory Optimization

Management Consulting

Industry: Direct Selling

Objective: Develop and implement a demand plan that extends to an 18 month period as well as proceduralize all related activities

Overview:The client had been experiencing stock-outs of key products, while having excess stock of slow moving items. Engagement with suppliers and optimizing batch sizes to meet specific demand, enabled the stabilization of the demand planning , inventory control and cost reduction of specific products. A demand planning tool was created which factored into account lead times and anticipated demand, which triggered order placement.

Outcomes:

• 18 month rolling sales forecast for standard and promotional items in relation to inventory on hand, sales and receipts
• Optimized ordering (Economic Order Quantity) resulting in R1m saving and increased service levels
• Safety stock and stocking policy defined for each category of product
• Optimization of Working Capital in terms of expediting/de-expediting purchase orders
• Implementing distribution from central warehouse to regional locations
• Facilitation of monthly Supplier meeting