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Case Study: Inventory Optimization - Telecommunications

Optimizing Inventory Across the Supply Chain#

Optimizing inventory levels across multi-echelon supply chains to meet or exceed customer service levels at the lowest possible inventory value.

Background#

  • Increased overall service levels from 85% to 95% while achieving an inventory eduction of more than 30%
  • Optimally positioned inventory across the entire supply chain
  • Determined an efficient inventory policy for finished goods and components to satisfy customer requirements and ensure product profitability

TelCom* is a leading telecommunications company designing, manufacturing and delivering high-end products to value-add centers in more than 20 countries. These markets, with a variety of sales channels, require high service levels and rapid time-to-market for their wide range of products.

Challenges#

Given a product portfolio with thousands of SKUs, high market variability and heavy seasonality, TelCom wants to achieve a significant improvement in service levels with minimal inventories. This is further complicated by long and often unpredictable component lead-times.

Solution#

SimFlex proprietary Inventory Optimizer considers customer demand variability and lead-time fluctuations to define the optimal safety stock levels for each product and component at each site in the supply chain. As a result, customer service levels can be increased, while reducing the amount of capital tied up in supply chain inventories.

Results#

SimFlex provides a recurring method to optimize inventory across the entire supply chain. This determines an efficient inventory policy for each finished product and component to satisfy customer requirements, enable rapid time-to-market and ensure product profitability. TelCom's, service levels increased from 85% to 95% while achieving an inventory reduction of more than 30%.



*Company name disguised to retain confidentiality