Inventory Replenishment (Leading Distributors for aircraft fasteners)

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In this case study learn how BRIDGEi2i helped the world's largest Contract Manufacturer to segment the parts portfolio into logical groups that contribute differently to costs and profit and to calibrate inventory levels for each segment to ensure GM** /Turns balance.

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Inventory Replenishment (Leading Distributors for aircraft fasteners)

  1. 1. A Case Study in Inventory Replenishment A leading Distributor of Aircraft Fasteners Quick Context Objective a. ~44,000 SKUs, ~2000 customers, highly competitive speciality and commodity fasteners market b. Inventory availability is a key success lever in the distribution industry • 50% increase in Inventory Turns along with a 7% increase in Revenue • 22% lower stock outs Impact • BRIDGEi2i appreciates the fact that Inventory is an asset as well as a liability • Our frameworks for Inventory Calibration allows for strategy dynamics in an organization Key Success Elements Our Approach 3 Months 2 Years Client Project length Length of relationship with client • Data from the ERP was accessed securely through client VPN • Quotes, Bookings and Inventory data for full part portfolio updated every week • Macro data like competitor and customer stock price movements from Google Finance • A unified database created at BRIDGEi2i private cloud in AWS • SKU was segmented based on Gross Margin %, # of customers, volatility of part & vendor performance • Turn targets were established such that the blended inventory turns for the full portfolio was close to the strategic objective of the company • Analytical Hierarchical Process (AHP) to be able to prioritize and de-prioritize the pull-in and push out parts • Monthly replenishment dashboard that gives a full portfolio view of parts, forecasts and projected end-of-month inventory scenario with recommendations on corrective actions • Higher On-Hand inventory with higher Turns meant a better operations process Data Management Algorithmic Play Operationalization a. To segment the parts portfolio into logical groups that contribute differently to costs and profit b. To calibrate inventory levels for each segment to ensure GM** /Turns balance * GM – Gross Margin

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