Reducing stock levels and increasing delivery readiness – who wouldn’t want that? However, if you can’t see the wood for the trees yourself, you should consult an external consultant. But not just any old one, but one that specializes in material flow and logistics problems.
One focus of Abels & Kemmner’s consultants is the streamlining of value chains (supply chain optimization) for series and variant manufacturers as well as wholesale companies. The service provider deals with the design and optimization of order processing and logistics from suppliers to customers and from article assortment to IT support.
The case of Emsa Holding AG shows what the consultants’ work can look like in practice. The company produces a wide range of household, home care and garden products at sites in Emsdetten and Swansea (Wales). The product range comprises around. 1,500 end products, of which approx. 1,150 are household items and approx. 350 are garden items.
After the introduction of material management and production planning modules from SAP/R3 in 2002, the consultants from Abels & Kemmner were sent on a search for optimization potential. The results showed that the desired delivery readiness level of 98% for household items can be achieved if around a quarter of this stock, which currently accounts for around half of the total stock value, is reduced. This means that around 14 percent of the total inventory can be reduced – a clear liquidity reserve!
“The example also illustrates that the introduction of an ERP system alone does not automatically lead to improvement. Rather, it is necessary that the potential is also exploited. There is usually a lack of expertise in this area – both in medium-sized and large companies”according to the consultants. The reason for the previously undiscovered savings potential at Emsa was that sales planning was carried out without product differentiation. All articles were treated similarly. Accordingly, there were no storage and delivery strategies tailored to individual product groups. As a result, there were very large deviations in the planning for individual items, which led to shortfalls.
