A multinational construction equipment manufacturer built through the acquisition of 18 entrepreneurial companies was suffering from excess inventory across raw, work in process and finished goods. The organization had over $400M in inventory, which was consuming free cash.
Senior executives had no visibility into company data and were unable to accurately forecast future requirements resulting in a misalignment between sales expectations and inventory. This, combined with a lack of communication between the businesses, meant no one in the organization had a clear picture of what was happening in the market.
In a bid to overcome these issues and release millions of dollars in cash, leadership engaged Maine Pointe. Our objective was to rapidly and sustainably implement a sales and operations planning process, accompanied by inventory management practices, across all 18 subsidiaries.
Maine Pointe’s focus in this engagement was on identifying key individuals across the business and going out into the field to coach and develop them as S&OP practitioners. Given that many people across the organization had not heard the term “sales and operations planning” before, this was a significant challenge. Within 12 weeks, the first S&OP pilot was underway, and all 18 entities were calculating required inventory levels based on the ‘plan for every part’ tools deployed by Maine Pointe.
Our solution included:
The mantra, “Don’t build what can’t be sold. Don’t buy what isn't needed,” became common place across the 18 subsidiaries with over 200 personnel engaged in inventory management and sales and operations planning cross-functional teams. S&OP skills were transferred to more than 150 personnel across the organization to assure sustainability. More advanced demand forecasting techniques were transferred to a further subset of 40 personnel.
Maine Pointe’s hands on approach and cross-functional, Total Value Optimization (TVO)™ methodology delivered the following benefits: