Benchmark & Case Studies

Supply Chain Optimisation in the Automotive Industry

Challenge





Before State

Problems


  • Low level of stock turnover for components and raw materials
  • Large volume of WIP
  • Long Lead Time for purchased components
  • £500k spent on exceptional transport costs


Root causes


  • Purchase of components and raw materials in accordance with forecasts
  • 50% of components sourced from distant suppliers
  • Lack of visibility of stock levels for each reference
  • Information gaps between storage and component consumption

Solutions


Future State



  • Pull planning for the entire value chain
  • Negotiation of delivery Lead Times and definition of order points for replacement of components and raw materials
  • Development of suppliers located within closer proximity, improving the service conditions
  • Partnerships with suppliers for the consignment of raw materials

Results

Stock turnover

Stock Turnover (year)

Stock turnover increased by 40%.

Exceptional Transport Costs (£)

Exceptional Transport Costs (€)

Exceptional Transport costs decreased by 60%.

Are you interested in Kaizen Institute's consulting services?

We assist client teams in achieving great results by putting breakthrough paradigms into action.

Are you interested in Kaizen Institute's training courses?

Kaizen Institute's distinctive training programme includes learning the theory, putting it into practice and visiting benchmark Gemba.

arrow up