Distributor Beats the “China Syndrome”
Long supply lead times, ‘full container’ batch sizes, single point of entry are familiar issues to anyone sourcing product from China. Learn how one SMT client adopted a three step process to fix its “China Syndrome”…
SMT’s client is a distributor of branded materials handling and safety products designed and marketed in Australia and sourced from manufacturers in China. Like many importers, the long lead times and large shipping batches associated with the China supply chain had resulted in poor stock turns, high costs of obsolescence and mark downs and excessive storage and land distribution costs.
The Solution
The solution was split into three stages.
Stage one involved improving the inventory control so that the right inventory was held at the right place at the right time. This involved implementing SMT Consulting’s Instoc. Instoc provides statistical forecasts, safety stock and represents them in a graphical representation.
Stage two involved reducing the cost of warehousing and distribution. This focused on increasing the efficiency of picking by reducing travel time by changing the warehouse layout.
Stage three involved reducing the cost of obsolescence and mark downs. In this stage new financial controls , buying processes and accountabilities were put in place.
The Bottom Line
- Overall stock levels reduced by $2 million in 8 weeks
- Increased ex-stock availability
- Increased forecast accuracy
- Picks per person in the National DC increased from about 2 per hour to almost 5 per hour.
- Pick accuracy increased
For More Information download the pdf >Beating the ‘China syndrome’