The Decoration business unit of Frankfurt-based DMC AG increased its delivery readiness level to over 98% and reduced inventories by more than EUR 1 million.
The restructuring of production and inventory management was carried out with the support of Abels & Kemmner GmbH, Herzogenrath/Aachen, according to the 80/20 rule of thumb: the company now only produces 20 percent of its articles continuously, but these account for 70 to 80 percent of sales. The rest is predominantly produced only by order and on defined delivery dates, which are coordinated with the supply chain and production logistics.
The restructuring improved both customer satisfaction and the company’s liquidity as well as its earnings situation, as the storage costs required for these stocks (insurance, warehouse management costs, interest on tied-up capital, etc.) are no longer incurred. On average, series and variant manufacturers such as DMC assume that this is around 15 to 25 percent of the stock value.
