CASE STUDY- VALUE ACCELERATOR
SPG’S INVENTORY VALUE ACCELERATOR RESULTED IN 200+ PERCENT IRR AND SAVINGS THAT DROPPED DIRECTLY TO THE CLIENT’S BOTTOM LINE
Inventory management is a critical part of ongoing business operation and a key to the organization’s success. For many organizations, inventory costs tend to account for one of the largest expenses for the organization locking up the organization’s valuable resources. Furthermore, in today’s unpredictable business and trade environment, effectively managing your inventory strategy is an imperative for almost every organization – as unexpected changes can negatively and dramatically impact an organization.
Our client in the Aerospace industry engaged SPG to assist them in improving their inventory management and to reduce their carried inventory’s significant cost burden. SPG conducted an Inventory Value Accelerator across a three-week period involving SPG’s experts, the client’s key management and local team. The Value Accelerator resulted in identifying multiple implementable strategies that generated $6+ million in savings within 6 months and an IRR of 200+ percent.
As part of the accelerator, SPG conducted a deep and comprehensive analysis of existing inventory, material flow, and inventory management practices.
SPG’s supply chain experts who collectively have decades of inventory management experience worked closely with the client team to identify new opportunities that had the potential to release inventory capacity and costs. These strategies included innovative warehouse consolidation strategies that did not require capital expenses allowing for greater utilization of warehousing expenses.
SPG validated and quantified the benefits of the warehouse consolidation and identified additional medium term and long-term capacity release strategies for future implementation.
SPG’s team generated savings through inventory reduction, carrying costs, eliminating lease expenses, and improving asset utilization which resulted in doubling the anticipated savings while also improving inventory flow through reducing volume and transport distances of materials across the worksite by 60 percent and management.