Company Doubles Turns, Cuts Costs with New Inventory Plan
Developing World Class Operations

Client
A leading manufacturer of frozen baked goods.

Issue
Capacity constraints leading to missed deliveries and unacceptable service levels. Excess and misplaced inventories throughout the distribution system.

Newmarket's Role*
Developed, piloted, and implemented inventory management programs to more than double inventory turnover, increasing turns from 6 to 14. Reduced changeover times, improved delivery, and reduced working capital by over $2 million. Improved throughput and reduced operating costs by over $500,000.

Implementation

• Detailed process flows: Mapped process flows and analyzed uptime. Tracked causes of delay to changeover. Analyzed delivery performance to assess causes of missed deliveries.
   
• Categorized inventory: Segmented inventory to segregate low volume products and isolate delivery problems. Implemented segment-driven inventory policies and scheduling procedures.
   
• Piloted new approaches: Beta-tested new approaches. Refined policies and procedures.
   
• Managed rollout: Implemented program in multiple facilities. Analyzed additional product lines and developed training programs. Managed implementation.

Key Element: Creative Inventory Strategy
By creatively segmenting inventory and rethinking inventory approaches by segment, Newmarket was able to improve delivery performance, improve throughput, reduce costs, and significantly reduce inventory levels - all at the same time.

* Through predecessor firm

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