• Performance stock metrics : Shared objectives are missing and/or not cascaded along the process
• Inventory analysis:
  • Stock coverage is 14 months for one major product and above 5 months for other products
  • No inventory targets (min/max) are calculated
  • Stock is mainly composed of WIP located at internal plants or CMO and significant part of the inventory is old and ultra slow movers items (i.e. 42% of stock value for one major product is at one production site and is > 1 year old)
  • Cost of obsolescence linked with supply chain issues is 20 M€
• Lead time :
  • Lead time is mainly made of waiting time (including shipment time to CMO and release time)
  • Visibility on lead times along the supply chain is low
• Planning process and tools:
  • High product flow complexity has to be managed in planning (process / tools)
  • Risk: Planning process rules are managed individually and implemented in Excel including MRP calculation (i.e. 53 Excel sheets for S&OP of one major product)
  • Lack of master data fulfilment in SAP
• Stock culture, responsibilities and ownership:
  • Focus are on financial aspects of inventory rather than on operational performance ones
  • Few process control and planning standards

• Reduce the total inventory level by 10 M€ in 2015 and by 10M€ again in 2016
• Define objectives and computed targeted stock levels
• Realize S&OP field coaching and increase master planners competencies
• Optimize inventory strategy
• Define performance stock metrics and ownership
• Design supply chain "TO BE” processes
• Mitigate risk at master planning level
• Integrate supply chain complexity in requirements stage of the new ERP project (i.e. postponement strategy / “alternative BOM”)

1. WIP Stock:

• Decrease lead-time distribution
• Reduce in-progress inventory
• Identify and analyze under performance causes
• Implement flow tighten

2. Supply Chain Parameters:

• Define inventory parameters computation methodology
• Define reliable and understood parameters
• Share and implement common parameters
• Monitor inventory levels (in terms of coverage) with regards to inventory minimum and maximum levels
• Realise training and field coaching

3. Lead Time:

• Analyse lead times and quantify improvement potential (per plant / product)
• Define target lead times per production stage
• Identify constraints and structure an EOQ / EPQ approach

4. EOQ / EPQ / Production Frequency:

• Compute economical production frequencies and quantities with a pragmatic approach
• Build the EOQ / EPQ model

5. Operational Supply Chain Metrics:

• Map the “AS IS” supply chain monitored KPI
• Underline gaps and propose a shared Balanced Scorecard (BSC)
• Cascade KPIs and objectives from BSC to operational teams
• Develop prototypes for KPIs