Automotive

OUR CLIENT

Our client is a global technology and industry leader in vehicle architecture, developing safer, greener, and more connected solutions that enable the next generation of autonomous vehicles, smart cities, and connectivity.   The business operates as a component part of the automotive industry supply chain, generating revenues of more than $17 billion. 

BUSINESS CHALLENGES

Bringing together all the data required to manage inventory was proving a challenge.  Planners were bringing data from multiple systems into spreadsheet models to manage inventory and keep production lines running.  This data included current stock and demand volumes, purchase orders, and delivery schedules.  Using multiple spreadsheet models was time-consuming, prone to error, and often resulted in the business incurring unnecessary last-minute orders.  This risk was often mitigated by over-ordering which was driving up levels of excess stock in the medium to longer term.  Planners were finding it difficult to assess strategies to reduce excess inventory and the capital in stock.

SOLUTION

Profit& delivered an Inventory Planning Solution on the Anaplan Platform.  This brings all the data required for inventory planning together in one place.  This includes sales orders, demand forecasts, purchase orders, stock records, and production schedules.  

Inventory Planning

Planners have a single report that shows stock levels alongside stock policy over time.   This gives them a forward view of inventory levels so that they can ensure inventory remains within stock policy, and a clear view of where inventory is in the supply chain at any point in time, including warehousing, orders placed, expected delivery dates, in transit, and in production.  The Management Dashboard provides all the information required to highlight where action is needed to prevent and resolve issues with stock policy and to monitor KPIs.

Excess and Obsolete

Real-time inventory levels alongside demand forecasts provide planners with clear visibility of excess and obsolete stock.  This has enabled more timely action to mitigate against the build-up of excess stock and ensure faster more efficient disposal of obsolete stock as and when it occurs, ensuring efficient use of warehousing and reduced capital in inventory.

Scenario Planning

Planners test different approaches to managing stock policy and excess and obsolete stock.  Comparing forecasts with actual sales orders provides insight into forecast accuracy, highlighting opportunities to drive greater efficiency in inventory management and reduce the occurrence of excess and obsolete stock.

BENEFITS 

16 times return on investment in 3 years

The business calculated cost savings from reducing excess and obsolete parts by half, as well as stock optimisation.  Overall, this equates to 16 times return on investment in the Anaplan Digital Platform in 3 years.  In addition, they were able to identify extra revenue due to improved order fulfilment rate. 

Process Improvement

Monthly planning, consolidation, adjustments, and approval process time has been reduced and the Excess and Obsolete Management Report of plans and actions is now ready for top management review in hours compared to days prior to this solution.

Replacing legacy solutions and multiple spreadsheets with the Anaplan platform for inventory planning provides clear visibility of inventory across the entire supply chain, from orders placed right through to delivery.  Accuracy and reliability of data are assured and excess costs resulting from errors, last-minute ordering, and capital tied up in excess stock have been brought under control.  Planners spend less time manipulating spreadsheet data and more time working through scenarios to test different strategies for stock management, such as different ordering volumes and timings, comparing forecasts with actual demand, or the disposal of excess stock.  Greater control over excess and obsolete stock has resulted in 16 times return on investment in the Anpalan platform in the first 3 years.