Case Study - Packaging Manufacturer Upgrades Value Chain
Client
A multi-billion dollar packaging manufacturer and distributor.
Challenge
To be the one-stop source for packaging products in a highly competitive, cost-critical market requires the alignment of 39 manufacturing and 8 distribution facilities across the United States, Mexico and Canada. The immediate challenge in one business segment: Reduce inventory levels and improve forecast accuracy.
Solution
Starting the journey toward a lean value chain, a thorough analysis of demand patterns accelerates adoption of a demand-based replenishment system. Statistical forecasts incorporate promotion and point-of-sale data. SKU rationalization eliminates some slow-moving, highly volatile products.
Results
Pull system reduces inventory levels by $1 million for a single product line while simultaneously improving case-fill rates from 97.7% to 98.5%. Shipping orders direct from the factory further reduces inventory, related carrying costs and transportation costs. Standardized process improves forecast accuracy from around 55% to upwards of 75%.
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