Inventory Reduction

Do you have excessive money blocked as Inventory

Inventory is a major cost component in an organization and if not managed scientifically can result in a significant amount of blocked up capital depriving the organization of operating expenses. A large inventory impacts profitability. A higher level of raw material, work in process, and finished goods are responsible for blocked up capital. Defining optimal inventory requires consideration of several aspects and that makes it complex.

How Do We Do?

• Study the processes and their cycle time.
• Understand the variation in demand and variation in the lead time of supplier
• Consider the uptime of machines
• Consider the bulk purchase discount and develop a trade-off model
• Identify contingencies and develop a contingency plan
• Define the optimal level of inventory for three areas – raw material, WIP, and finished good

Implemented At:

• Eastman Auto and Power Limited, Nalagarh
• Eastman Auto and Power Limited, Baddi

Duration 3 – 6 months