A Global Branded Spirits Producer Implements Inventory Control Measures to Improve Working Capital

Client Context

• ~$2.5B Global branded spirits producer with a business unit focusing on regional specialty beverages in glass and PET bottles

Key Challenges

• The days-on-hand for raw material inventory were 3X-4X the leading competitors
• Overall space requirements had doubled leading to the leasing of space at a 3rd party warehouse
• Lack of inventory control was leading to material losses and reduced E2E traceability

Approach & Key Success Factors

EFESO supported the client in:

• Establishing a perpetual cycle linking one-time reduction efforts with ongoing daily controls to maintain the achieved reductions
• Creating and rolling out standardized inventory benchmarks to guide inventory management practices
• Harmonizing demand through the SIOP process with incoming supply to minimize shortages, obsolescence, and the need for expediting
• Implementing negotiation strategies to foster improved collaboration between clients and suppliers
• Facilitating a collaborative approach between Materials Planning and Procurement to enhance material traceability
• Enhancing the ERP system by updating critical master data fields to streamline and automate the MRP planning process

Results

33%

Reduction ($4M) in inventory within 90 days

80%

Reduction in number of pallet spaces needed

40%

Reduction in spending from a key supplier

500k

In spending from another key supplier

75%

Reduction in 3rd party warehouse fees