Case studies

Some recent case study experiences 

Case 1 – Reducing inventory costs

Problem Statement
A large electrical products producer had an excessive amount of inventory in finished goods for its European operations. Each market demanded that the inflated inventory levels be maintained to assure product availability. Yet this policy imposed a financial burden on the business that was considered too high by regional management.

Objective
The team’s objective was to reduce the consolidated European inventory level over the course of the next two years. They learned from executives from other industries who had themselves addressed similar challenges. Then the team redesigned a host of relevant processes (like forecasting, allocation, costing to country operations, safety stocks, slow-moving stock, and tender processes) and customized these processes for their own company so that inventory levels were brought to an affordable level, without impairing business results.

Results
The team identified ways to reduce finished goods inventory by 10% over 2 years. During the first year, the company realized multimillion € savings per year.

Case 2 – Productivity improvements

Problem Statement
The Central European operations of a large FMCG had grown rapidly in the region. However,as the markets were maturing, growth was slowing down, putting the company under increasing cost pressure. As a result, the company needed to aggressively manage its costs without making employees redundant.

Objective
The team’s objective was to explore specific productivity challenges in the business, to identify the processes that would offer the greatest improvement opportunities, and then to propose solutions to these process issues.

Results
The team identified the product portfolio as one of the largest productivity issues. They designed a process to clean up the current portfolio and to redesign the system that created and approved new products. The outcome was a plan which could be implemented immediately.

Case 3 – Corporate Social Responsibility (CSR) in the Supply Chain

Problem statement
A UK company did not have a CSR policy to assess whether its third party suppliers were behaving in a socially responsible way. The lack of a systematic CSR approach potentially left the company brand exposed to the risk of negative publicity.

Objective
The team was asked to develop a responsible procurement policy with defined standards and a process to implement that policy. This goal of the process was to identify high-risk suppliers and design an auditing approach that would improve the socially responsible behaviour of these suppliers.

Results
The company’s newly-designed policy was introduced within several months and supplier audits were completed by year end. The team placed second in a prestigious Procurement Leaders’ Awards, went on to win a SIPS award in 2008, and won an internal award for the implementation of their project. The leader was asked to roll out the CSR program in rest of Europe.