The multi-location hub-and-spoke network of branch operations faced challenges in controlling material movement between suppliers, customers, and branches. Inventory mismanagement led to shortages, overages, customer service problems, and increased costs.
Carpedia’s Opportunity Assessment identified issues requiring attention, including a lack of managerial oversight at the branch and regional levels that resulted in inefficient planning and scheduling of warehouse labor and transportation units and lead to unnecessary costs. Inventory management and material availability problems caused delivery delays, revenue losses, and increased expenses. To address these issues, a comprehensive overhaul of the supplier/branch/customer network was necessary. Leaders needed better visibility tools to make informed decisions and foster a performance-oriented culture.
Carpedia designed an Engagement with the primary goal of reducing costs while improving customer service. Through successful execution of the strategy, financial return exceeded the original upside value estimate by the end of the engagement, representing a 2.7:1 ROI.
Key changes included:
- Conducted leadership training in Active Management and Employee Engagement
- Provided coaching on proactive material management and resource scheduling
- Installed inventory planning tools to improve stock levels, reduce overages/shortages, and limit interbranch stock transfers
- Installed improved scheduling methodologies utilizing updated standards
- Increased direct shipment percentages, reducing unnecessary handling
- Generated problem-solving behaviors through the installation of dashboards for each branch, each region, and the overall network
- Implemented standard methods of operation across the network locations
The Results
- 15% Increase in supplier-to-customer direct shipments
- 12% decrease of interbranch stock transfer lines
- 20% increase in warehouse lines per labor hour
