Distribution – Supplier

Saleable Inventory Items: 313

Carrying Cost of Inventory: 24.6%

Order Fill Level Targets

%
A Items
%
B Items
%
C Items

Initial Inventory Analysis 

Order Fill Level Current
“A” Items 81.1%
“B” Items 94.7%
“C” Items 95.3%

Average Days of Supply 
“A” Items 52.1
“B” Items 82.1
“C” Items 242.1

Total Current Inventory $73,846 

Root Cause Analysis – Top Three Issues 

  • Safety stock levels calculated incorrectly
  • Lead times incorrect
  • Lack of analysis discipline and processes

Results Analysis after Six Months 

Inventory Investment $54,007

Cash Flow Generated $19,839

Carrying Cost Reduction (annual) $4,880

Order Fill Targets Met or exceeded

Distribution – Wholesaler

Saleable Inventory Items: 1,728

Carrying Cost of Inventory: 23.8%

Order Fill Level Targets (Scroll for more…)

%
A - Items
%
B - Items
%
C - Items

Initial Inventory Analysis 

Order Fill Level Current

“A” Items 87.8%
“B” Items 94.1%
“C” Items 97.6%

Average Days of Supply 

“A” Items 32.8

“B” Items 64.2
“C” Items 224.0

Total Current Inventory $1,096,875 

Root Cause Analysis – Top Three Issues 

Inaccurate forecasting methods

Inconsistent lead times from suppliers

Inaccurate perpetual inventory records 

Results Analysis after Nine Months 

Inventory Investment $751,360

Cash Flow Generated $345,515

Carrying Cost Reduction (annual) $82,233

Order Fill Rate Targets Met or Exceeded