Challenge
Demand Planning Challenges on the Cutting Board
Cutting Down Inventory Carrying Costs Our client had been grappling with the issue of excess inventory costs. The conventional approach they’d been following at their warehouses involved maintaining an inventory level of between 14 and 21 days. This approach led to higher holding costs and lower fill rate, as well as operational inefficiencies resulting from overstocked warehouses. Dicing Demand Variability A significant challenge for our client was the erratic and unpredictable nature of demand across various SKUs from a prominent customer. Traditional forecasting methods, which often relied on historical data and established patterns, led to a heuristic approach to inventory stocking. As a result, our client struggled to cope with this level of demand variability that was marked by sharp fluctuations, seasonal variations, and unforeseen shifts in product demand preferences. Chopping Up Supply Chain Complexity Confronted by intricate distribution channels and a diverse product portfolio, our client realized that streamlining the supply chain was a top priority across all their SKUs. Without any data analytics, they struggled with tackling logistical hurdles, coordinating warehouse manpower, optimizing production, and managing deliveries. Their primary target was to achieve cost-effectiveness and responsiveness, ensuring they could meet the evolving demands of their customer effectively.
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