Working Capital Reduction
"There are six fundamental rules of planning, these rules apply in the simplest of job shops and the most complex supply chains." - Andy Redfern, Chartwell Partner
Industry
Consumer goods – Liquid consumer products
Support Level
1 consultant, 3 months
Objective
Regional and national warehouses were at capacity, working capital tied up in inventory was at an all time high and paradoxically, customer stock outs were frequent and damaging key accounts. The project objective was to resolve these problems.
Results
In less than six weeks the stock outs were dramatically reduced and inventory levels were declining rapidly.
Why was chartwell brought on board?
The client had a market leading position with their packaged liquid consumer goods product, supplying all the largest national customers. Despite leading technology and Material Resource Planning (MRP) system the business was under enormous strain due to the high level of short stock where they were unable to supply their goods. In an attempt to solve the problem stock levels were allowed to grow but the problem got worse.
Results of the 3 month project
- Stock Outs reduced by 75 % in less than 3 months
- Working Capital generated through inventory reduction: £2.2 million
- Reduced manufacturing run time saved £650k worth of overtime and temporary labour