No order without demand

Following the inventory optimization, significant savings were achieved in the various departments at Thermo Electron. The storage area was reduced by 60%SUPPLY CHAIN PROCESSES. The sanitary and bathroom specialist Hansgrohe is currently optimizing its supply chain processes in collaboration with the Leonardo Group and Abels & Kemmner.

Thanks to the newly introduced, demand-oriented pull system in production and procurement, no more orders will be triggered without a demand requirement with immediate effect. The resulting inventory reduction potential for raw materials is enormous, increasing liquidity by over 30%. Based on an average of 16% of total assets in the manufacturing industry, each company can create liquidity of just under 5% or EUR 48,000 per million of total assets if implemented in the same way. The money released can be booked as profit or invested in personnel, securing the location or even in price reductions in order to increase competitiveness. As the debt service for these inventories is eliminated, the unit costs fall accordingly.

Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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