CASE STUDY

Inventory Optimization Delivers USD 40 Million Revenue for Bottle Manufacturer

Sep 23, 2016

Business Challenge

Creating optimized inventory levels in varying demand conditions. A global plastic bottle manufacturer and supplier to beverage companies wanted to improve its inventory planning, to ensure it had optimum levels of ready stock in varying demand scenarios while not having too many stale inventories.

Situation

Lack of inventory management, leading to lost sales

The client was facing inventory planning issues for its manufactured stock, resulting in lost sales. Due to lack of inventory management, the client was unable to determine the appropriate inventory levels for managing demand, safety stock levels to hedge against demand uncertainty, and ensure availability of products while reducing costs due to stale inventories.

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Solution/Approach

Real-time monitoring, analysis and forecasting to create inventory optimization plan

We collected data from the client’s sales, production, distribution and warehousing processes, and used scenario analysis, impact analysis, predictive modeling, and real-time monitoring of stock, in order to determine the optimum inventory levels, cost of standing stock, opportunity costs for lost sales due to unavailability of products and aid in effective inventory planning for the client.

Impact

Improved revenue by USD 40 million

The client was able to determine the stock replenishment levels based on demand forecast and criticality of need. This ensured they had optimum product stocks in varying demand conditions which improved their revenue by USD 40 million the next year.

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