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| Case Study |
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Patni develops an Inventory Disposal Planning system for a global consumer products company |
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An efficient reports-driven monitoring tool helps to rationalize the SKU Management process and bring USD 3m in annualized carrying cost-savings
The Client
A large consumer products company with major manufacturing facilities in the US and Europe, and operating in 200 countries.
The Challenge
The client wanted to improve upon its SKU Management process for the disposal of inventory, to be able to identify its slow-moving products and make timely decisions as to when an item must be taken off the shelf and disposed off
The Solution
Patni partnered with the client to carry out end-to-end development of a monitoring tool with pre-defined reports needed to support the process of tracking and execute the process of disposal of rationalized SKUs.
The SKU management process utilizes a simplified market level profit valuation of the demand plan of the individual SKU. This profitability is aggregated across all markets within a region to determine the regional profitability of the SKU. If the regional profitability of the SKU overtime does not meet the defined hurdle rate, then the SKU must be identified for elimination.
Patni's solution involved generating reports and trigger processes that would help make critical decisions and take action at the appropriate time to reduce or manage the inventory of SKUs. The reports are as follows:
Action Report: It lists all rationalized SKUs that require the set up of a disposal plan. Disposal plans include sell off, break down, disposal, charity, transfer, etc. They have a clearly defined execution period by which all remaining inventory should be disposed off.
Monitor Report: This ensures the follow-through and completion of the disposal process. It indicates the progress against each planned disposal.
Escalations Enabled Report: Failures to adhere to the applied disposal plan or to meet the deadline are identified from the Monitor Report and escalations enabled using this report.
Slow-moving Report: This report identifies the slow-moving SKUs and lists demand, inventory and months of forward coverage.
Non-working Inventory Summary Report: This report is used by Management at the regional and higher levels within the global value chain organization, to understand the exposure the company has in the form of inactive and potentially inactive inventory. The report is also used by financial organizations in preparing and tracking inventory reserves.
The Technology
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SAP BW 3.0b |
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Front End: BeX |
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Database: Oracle 8.1 |
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Autosys. |
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The Benefits
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Patni's onsite-offshore model helped the client through:
—Quick ramp-up to meet various technology skill requirements, at relatively lower costs
—Significant reduction in IT spending by having key resources onsite and coordinating with the offshore team through the offshore model
—End-to-end project responsibility resulting in a single vendor contact.
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Rationalization to provide USD 3m in annualized carrying cost-savings |
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Process will enforce disposal of promotional goods within one quarter of completion of the promotion. This is much faster than the current practice and will result in an additional USD 1.3m generated from reduced carrying costs.
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