A Global Branded Spirits Producer Implements Inventory Control Measures to Improve Working Capital
Client Context
- ~$2.5B Global branded spirits producer with a business unit focusing on regional specialty beverages in glass and PET bottles
Key Challenges
- The days-on-hand for raw material inventory were 3X-4X the leading competitors
- Overall space requirements had doubled leading to the leasing of space at a 3rd party warehouse
- Lack of inventory control was leading to material losses and reduced E2E traceability
Approach & Key Success Factors
ARGO-EFESO supported the client in:
- Establishing a perpetual cycle linking one-time reduction efforts with ongoing daily controls to maintain the achieved reductions
- Creating and rolling out standardized inventory benchmarks to guide inventory management practices
- Harmonizing demand through the SIOP process with incoming supply to minimize shortages, obsolescence, and the need for expediting
- Implementing negotiation strategies to foster improved collaboration between clients and suppliers
- Facilitating a collaborative approach between Materials Planning and Procurement to enhance material traceability
- Enhancing the ERP system by updating critical master data fields to streamline and automate the MRP planning process
Results
33%
Reduction ($4M) in inventory within 90 days
80%
Reduction in number of pallet spaces needed
40%
Reduction in spending from a key supplier
500k
In spending from another key supplier
75%
Reduction in 3rd party warehouse fees