We have a strong track record of releasing tied up capital with particular experience in successfully reducing inventory through operational flow design. Results can be dramatic and the benefits of releasing cash are often supplemented by operational improvements brought about by the improved flow and control of inventory through the plant.
Case Study - Inventory reduction and lean transformations
A private equity company needed to release tied up capital in the form of inventory. The plants had reduced inventory historically and were finding difficulty in going beyond recent flat line performance.
What we did:
We analysed which plants had the greatest opportunity to liberate cash tied up in inventory and worked with them on inventory planning on a bottom up basis to help design a future state and quantify the benefits which could be realised. The plants were supported to deliver the benefits over a period of months. Inventory reductions were measured as a part of the wider lean transformations being supported across the organisation.
What they got:
All of the plants saw a reduction in inventory without any impact on customer service. The average reduction in inventory from lean tranformations was 42%. Having a systematic way to plan for inventory allowed more accurate financial planning and budgeting.