As a manufacturing company, inventory management is an essential part of the process. Think of dealing with issues such as overstocking, stockouts, and inefficient inventory rotation. These issues can lead to unnecessary costs, missed sales opportunities, and decreased customer satisfaction. Utilizing mathematical models provides effective solutions and tools for identifying improvement opportunities.
For the German manufacturing company Freudenberg, we implemented an inventory (“stock”) model to optimize inventory management. The goal of this model is to improve the inventory of raw materials and finished products by calculating the most optimal batch sizes, the Economic Batch Quantity (EBQ), for both raw materials and finished products. Mathematical models are incorporated into this process, determining the most optimal production quantities based on demand patterns and inventory costs. Based on these determinations, a safety stock is established, and the inventory management of raw materials is improved. This has significantly reduced production costs by more efficiently utilizing machinery and inventory.
But the project doesn’t stop there; an essential part of such projects is the implementation plan and focusing on training staff to effectively execute the new inventory management process. This promotes a sustainable approach in both production and among employees. Supply Value possesses the necessary project and change management experience for this purpose.
Inventory management extends beyond identifying such problems; it also involves striving for improved operational efficiency, cost reduction, and optimization of overall business performance through a better streamlined inventory management process. With the help of advanced analysis and forecasts, we can assist companies in optimizing their inventory levels, finding a balance between supply and demand, and striving for maximum operational efficiency. These models provide valuable insights that lead to informed decisions, allowing companies to respond more flexibly to market dynamics and competition while simultaneously reducing costs and increasing customer satisfaction.
Ready to optimize your inventory management and boost your business performance? Contact Supply Value today for tailored solutions that drive success.
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