Success Story Supply Chain

Inventory Management in Food Processing

The plant in question produces a variety of food products on a demand-based production schedule using different production lines. Input and output products have limited shelf lives, and meeting processing times is critical. An integrated spare parts warehouse ensures that planned and unplanned maintenance can be carried out when needed. An ERP system regulates how the warehouse is stocked through a defined stocking policy, e. g. an (s,q) policy. There are tens of thousands of spare parts on stock, spanning from parts worth a few cents to parts costing as much as a mid-sized car.

%

of spare parts have received improved ordering processes

Goals

  • Avoiding unnecessary overstocking, i. e. parts that are rarely in demand, as well as avoiding unplanned demands where the quantity of spare parts in stock is too low.
  • Control over the quality of the overall inventory policy and an understanding of how smaller and larger changes affect different KPIs.

Challenges

  • Large number of different spare parts, each having a set of fixed ordering parameters that are not routinely revised.
  • Manual corrections only happen selectively when something went wrong since the number of parts is too large to implement a manual quality check.
  • Previous warehouse strategy does not take into account and does not optimize the cost for the required service level.

Solution

  • Extraction of relevant data from the plant ERP system via an existing interface.
  • Automated process that consistently ensures an optimal stocking policy, e. g. by detecting changes in demand behavior
  • Mathematical methods help to identify problem cases on individual part level
  • Avoidance of stock-outs and corresponding unplanned downtimes or changes in production planning
  • Maintaining or increasing the service level, while taking all key factors into account, with a mathematically founded assessment of the current stocking policy

Result

Replenishment and inventory issues build up subtly. Plants are utilized differently, and production and maintenance strategies are adjusted. These changes cannot be translated directly into the management of the spare parts inventory.

This results in too little inventory for some parts and too much for others. Consequently, operators face high cost due to plant downtime on the one side and too much capital tied up in surplus stocks on the other side.

mi solutions considerably increased the quality of provisioning by applying intelligent analytics and ensures to consistently maintain this level in the future.

Your Contact

Carlos Ayala Jiménez

Carlos Ayala Jiménez

Phone:  +49 1516 2 60 74 21

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