Demand Planning and Inventory Optimization

Management Consulting

Industry:

 Direct Selling

Objective:

Develop and implement a demand plan that extends to an 18 month period as well as procedural all related activities

Overview:

The client had been experiencing stock-outs of key products while having excess stock of slow-moving items. Engagement with suppliers and optimizing batch sizes to meet specific demand enabled the stabilization of the demand planning, inventory control and cost reduction of specific products. A demand planning tool was created which factored into account lead times and anticipated demand, which triggered order placement.

Outcomes:

  • 18-month rolling sales forecast for standard and promotional items in relation to inventory on hand, sales and receipts
  • Optimized ordering (Economic Order Quantity) resulting in R1m saving and increased service levels
  • Safety stock and stocking policy defined for each category of product
  • Optimization of Working Capital in terms of expediting/de-expediting purchase orders
  • Implementing distribution from a central warehouse to regional locations
  • Facilitation of monthly Supplier meeting

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