We looked at the issue through the lenses of supply and demand. On the demand side, Kramp is using inventory management software to place incoming orders which also has a forecasting algorithm on top of it that serves as a planning tool. It became clear that there are some limitations both in the inventory management and in the forecasting methodology. That quickly became a main area of focus which had to be improved by revising buffer stock sizes, deep diving into seasonal sales patterns, etc.
On the supply side, two main obstacles were identified, which when solved will greatly improve Kramp’s response times and stock levels. Firstly, container shipments with long lead times were identified as a cause of preventable stockouts. And secondly, it was observed that manual purchase order handling was not always prioritized most efficiently and hence was not consistently within the desired response time. By designating alternative short-term suppliers and creating daily overviews for the business these critical points will be kept in check from now on.
Insight into the company’s data allowed us to consult Kramp on the best ways to reduce stock shortages. In the end, they managed to improve their response time, reduce unnecessary stock, and successfully activate their data.