20% inventory reduction for automotive parts manufacturer

Client Overview

The client was a high volume aftermarket automotive part manufacturer. Inventory turns were on the order of four and they stocked approximately 80,000 SKU’s, 75% as finished goods. They had a high incidence of inventory obsolescence. The client MRP tool was a legacy system from the late 1980’s.

Our Involvement

The parent company had mandated that they reduce inventory by 20%. The client had no metrics for buyers or planners. Our first objective was visibility. We developed a tool that interfaced with their mainframe to track inventory dollars by planner and by buyer. Reports were auto generated weekly. We performed an ABC inventory analysis and auto updated 80,000 parts with order/build rules. We conducted training to educate the buyers and planners.

The Result

In addition to providing the client with management tools, our updated MRP rules resulted in the required inventory reduction as well as a dramatic reduction in part obsolescence.

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