Inventory Management

Eliminating transportation between warehouses by rationalizing inventory levels

Inventory ManagementHow much inventory does your company have at your factories, offices, and stores? Many companies are having a hard time monitoring their inventory levels as their business expands and their supply chain becomes more complex. Fuji Logitech offers a full package of services ranging from inventory analysis to proposals for ideal inventory management, and the reconstruction of existing logistics systems to clients who are affected by excessive or dispersed inventory.

Case 1: Major food product manufacturer G

Current status and issues

Company G had its factories, branches, and stores nationwide manage product stock on their own behalf. As we conducted an inventory analysis, we discovered that the current process had issues such asbranches and stores having excessive stock of products that were rarely shipped or sold, and, on the other hand, products that sold well had fluctuating safety stock levels. Also, there were other problems such as frequent inventory transfers among branches to avoid stockouts, and decreased delivery efficiency caused by urgent production orders placed with factories.

Our proposal

Therefore, we proposed to reform the logistics system by implementing the following: (1) utilize a warehouse management system (WMS) for company-wide, centralized management of product stock; (2) supply products directly from warehouses located near factories to nationwide stores, bypassing branches; and (3) transfer the product bundling operation from factories and branches to warehouses.

Results of reforms

As a result of a series of logistics reforms, Company G could achieve the following benefits: (1) factories can focus on production as they no longer have to undertake product bundling; (2) the inventory in the supply chain that consists of factories, branches, and stores has been reduced significantly; (3) branches can focus on sales activities as they are no longer involved with the logistics process; (4) the costs incurred by inventory transfer have been reduced; and (5) products with greater freshness can be provided through direct delivery from factory warehouses to stores.

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