Success Stories: Demand Driven Inventory Process

Before using DDI, this customer issued purchase orders for product manufacture based on their forecast of demand. However, fluctuations in the demand curve left them with excess inventory at some times, while at other times, a lack of inventory meant they could fulfill orders only partially or not at all…leading to significant lost revenue. They incurred substantial costs expediting product as well. We often had to build products immediately and ship them overnight—not just within the U.S., but internationally, too. At Enercon, workflow planning suffered, leading to inefficiencies and challenges meeting all customers’ needs.

Once the customer agreed to have Enercon manage the inventory process with DDI, we worked together to facilitate daily monitoring of inventory–both receipts and usage—using automated reporting technology to minimize labor costs.

A supply agreement set ground rules and expectations, including minimum and maximum safety stocks.

We worked to anticipate consumption on a longer-term basis, which allowed us to purchase more efficiently, yielding greater leverage on pricing.

Leaving the materials in their most basic, flexible form (e.g., rolled steel sheet rather than formed product enclosures) lowered customer’s exposure to materials. Unused raw components could be used for other customers or returned to the supplier with nominal or no restocking costs.

Customer funds tied up in inventory dropped by 50%

Stock outages, formerly a monthly occurrence, have been eliminated

Costs for expedited shipping dropped from $40,000 per year to zero.

Customer reduced labor costs to manage inventory by 50%

Enercon reduced labor costs to manage inventory by 75%.