Overview
A leading manufacturing company faced significant challenges in managing its warehouse operations and inventory control systems, which were further complicated by an upcoming migration to a new ERP system. To streamline operations, enhance inventory accuracy and ensure a seamless transition to the new system, the company sought a comprehensive solution. They engaged with Caresoft Global to provide expert consultancy and support in addressing these challenges.
Project Scope
The scope of the project was divided into three primary areas:
1. Inventory Management:
Develop a comprehensive stock management plan for each part (PFEP – Plan for Every Part), implement a strategy to reduce the value of non-moving ‘D’ parts, and establish an ABC classification system. This system was designed to optimize stock levels and prevent out-of-stock situations, particularly for high-priority ‘A’ parts.
2. ERP Migration Support:
Provide assistance in the migration from the existing ERP system (JBA) to a new ERP platform. This ensured data integrity during the transfer, mapping existing processes to the new system, and identifying any gaps for further improvement.
3. Warehouse Productivity Improvement:
Redesign the warehouse layout and optimize inventory placement based on usage frequency. Additionally, implement standard operating procedures (SOPs) for key warehouse processes, and introduce visual management and Key Performance Indicators (KPIs) to promote a culture of continuous improvement.
Challenges and Opportunities
The company faced several key challenges:
- Inadequate Stock Management:
A significant portion of the inventory consisted of non-moving ‘D’ parts, valued at over $18 million, while 15% of critical ‘A’ parts were frequently out of stock.
- Data Quality Issues:
Poor quality data in the existing ERP system posed a substantial risk during the migration to the new ERP system.
- Warehouse Layout Inefficiencies:
The current warehouse layout was not optimized for efficient picking, leading to significant inefficiencies in storage and retrieval processes.
- Fragmented Communication:
The supply chain and tactical teams operated in silos, resulting in poor communication and a lack of visibility in inventory management.
- Lack of Standardization and Training:
There was a need for standardized processes and on-the-job training to ensure consistent execution and knowledge retention.
Solution Implementation
Caresoft Global employed a structured approach to tackle the identified challenges:
1. Inventory Management Plan:
- Developed a detailed Plan for Every Part (PFEP), focusing on optimal stock levels, reorder points, and safety stock.
- Implemented an ABC classification system to prioritize inventory management efforts, ensuring that high-value ‘A’ parts were always available when needed.
- Created tools and dashboards for real-time monitoring of inventory KPIs, enabling proactive decision-making.
2. ERP Migration:
- Conducted a comprehensive data cleansing process to ensure only accurate and relevant information was migrated to the new ERP system.
- Mapped current business processes and identified gaps for improvement in the new ERP platform.
- Provided both on-site and offshore support, including user acceptance testing (UAT) and detailed training for employees, to ensure a successful transition.
3. Warehouse Productivity Improvements:
- Performed an in-depth analysis of the existing warehouse layout and developed optimized layouts based on inventory movement patterns.
- Implemented standard operating procedures (SOPs) and visual management tools to standardize operations and boost picking efficiency.
- Trained warehouse staff on new processes and tools, promoting a culture of continuous improvement and accountability.
Results
The implementation of Caresoft Global’s solutions yielded significant improvements in the company’s warehouse operations and inventory management:
- Inventory Reduction:
The value of non-moving ‘D’ parts was reduced by 30%, freeing up both capital and valuable storage space.
- Improved Stock Availability:
Availability of critical ‘A’ parts increased, reducing stockouts and ensuring uninterrupted production.
- Data Integrity and ERP Functionality:
The successful migration to the Infor M3 ERP system, with clean and accurate data, enhanced overall business process efficiency and supported more informed decision-making.
- Enhanced Warehouse Efficiency:
The optimized warehouse layout and standardized procedures resulted in a 20% increase in picking productivity and reduced order fulfillment times.
Outcomes
By implementing a focused approach to inventory management, ERP migration support, and warehouse productivity improvements, Caresoft Global enabled the company to overcome its operational challenges and achieve significant efficiencies. The project not only optimized current operations but also established a foundation for continuous improvement, ensuring long-term sustainability and success in a competitive market.