Supply chain optimization
The sanitary and bathroom specialist Hansgrohe is currently optimizing its supply chain processes in collaboration with the Leonardo Group and Abels & Kemmner. The first results are now available: Thanks to the newly introduced, demand-oriented pull system for production and procurement, no more orders will be triggered without demand. The resulting potential for reducing inventories of raw materials increases liquidity by more than 30%.
In ten weeks, stocks of pilot articles were reduced by 50%. The prerequisite for this was a detailed analysis of the stocks and the simulation of the supply chain to optimize the logistical parameters. The results of the ABC/XYZ analyses carried out for this purpose showed a classic picture: While it is possible to keep inventories in the AB/XI’ area low in relation to sales, inventories of sporadically required items (Z2 items) and low-value C items were too high, as reflected by a low inventory turnover value.
Based on these findings, the next step was to define the parameters for stock simulation runs: A high stock turnover should be achieved for the high-value A and B items wherever possible. A covering period of five working days was selected for this purpose. A stocking period of 20 working days was selected for low-value C-items, which only has a minor impact on stocks but should keep the administrative and physical effort in purchasing and logistics to a minimum. The sporadically consumed Z2 items were also taken into account in the simulation, although these items should be procured on an order-related basis in future due to the higher inventory risk. All articles were simulated with three degrees of readiness for delivery in order to be able to assess the degrees of readiness for delivery and to determine the effects of the degree of readiness for delivery on stocks.
The results of the simulation runs revealed stock reduction potentials of up to 47%. The degree of readiness for delivery of future stock items was between 91% and approx. 96%.
