Our customer is one of the biggest and most competitive gear manufacturing company in China. Mainly engaged in drive gear manufacturing and selling, our customer has formed an all-round product line covering gears used in vehicles, business cars, motorcycles, engineering vehicles and electronic tools. Its customers are mainly large vehicle manufacturing companies at home and abroad. Our customer hopes to cut down inventory through better supply chain management.
1. The inventory ratio has reached 49% in 2014.
2. There was no clear coordination between production and sales department, and no operation center to maintain the balance between the production, supply and sales.
3. The original supply chain was simple. It lacked necessary processes and resulted in supply chain management problems like ambiguity of rights and duties, low efficiency, and severe inventory backlog.
4. The original sales plan was rough. No clear penalty rules were made when problems occurred, and this resulted in high inventory caused by human factors that can be avoided.
5. There was no pre-meeting before S&OP meetings. All issues were discussed in the formal meeting, which took up a lot of unnecessary management time.
1. Operation center was set up as an independent department. It broke the barriers between each process of supply chain management and focused on improve the supply chain management ability as a whole. General Manager of each branch factory directly report to the company’s general manager, which was good for full authorization and autonomous management.
2. The former processes were modified, and some new and necessary processes were added. New management thoughts and leading supply chain management practices were carried out in daily operations.
3. The former once a month production and purchasing plan was changed to 14 days plus 2 weeks rolling plan, which improved the ability of each branch factory to adjust flexibly to emergencies and sudden changes of orders.
4. Pre-meetings were added to identify problems and to propose solutions, which improved the efficiency of the formal S&OP meetings and gave full play to each branch factory to solve their own problems.
5. Different kinds of needs were classified. Examination and approval process was added to specify rights and duties. Safety stock was considered to make the demand management more scientific.
6. Inventory management strategies were refined from the perspective of value chain, in order to improve the efficiency of inventory management.
7. Current material coding system was maintained, but its way of description was changed to five-digit code + product type code + project code.
8. Information construction made each process from product development to demand plan, to purchasing plan, and to production plan more flat, transparent and efficient.
1.Inventory ratio was cut down.
2.The accuracy of production plans, predictions and supply plans were improved.
