Operational and Information Flow Assessment for a Third-Party Procurement and Manufacturing Provider to Reduce Costs
Client
The client provides integrated supply chain solutions supporting in-store merchandising. Its activities encompass display design, purchasing, distribution, kitting and light manufacturing functions.
Executive Summary
The client sought to reduce operating and inventory costs for a major customer. This was the first of a multi-phase project designed to identify strategic cost reduction initiatives to meet this goal. As a result of this effort, The
Revere Group provided the client with:
- Detailed inventory analysis by item
- Value stream maps of all inbound and outbound processes
- An implementation plan to execute the recommendations in subsequent phases
Recommendation identified a 20% inventory reduction opportunity, coupled with internal operational and material handling efficiencies.
Business Challenge
The client manages the distribution of Point of Sale (POS) display materials with a global leader in manufacturing of consumer packaged goods. It currently services 40% of its customer’s POS activity, with the remainder being served internally and with a few other service providers. In order to increase its service level and obtain more of the business, the client wants to improve efficiencies and reduce overall costs. The client requested that The Revere Group assess the information flow and order management processes of its operations as the first phase in driving down its customer’s cost.
Solution
The Revere Group assessed the client’s current state using:
- Data analysis
- Interviews
- Key Observations
The operation’s performance data was analyzed using a relational database designed by The Revere Group. The analysis provided the starting point for detailed process mapping. The process maps followed a Value Stream Mapping methodology to detail the value and non-value added processes with the distribution and manufacturing facility. Inbound and outbound flows were mapped using this methodology.
Results
The Revere Group recommended the development of documented processes supported by written communication and training. This project laid the foundation for Phase II, which provided a detailed inventory analysis and layout of the distribution facility. The ultimate result was the elimination of 20% of on-hand inventory and a corresponding reduction in space needs.