Outgrow Consulting

CASE STUDY OF A CLIENT IN ELECTRICAL APPLIANCES INDUSTRY


An Indian organization; one of the largest manufactures of power generators and distributors of motors / pumps across India.

Background

The client had stock valuing upwards of USD 5mm scattered across 9 stores. Historically, the management of the organization had failed in ensuring strictest implementation of the FIFO principle, ultimately leading up to aged and outdated stock. The business had been into existence for more than 50 years. The senior management was keen to do a one-time clean up and implement best-in-class inventory management procedures.

Additionally, there were multiple stock records (Tally, Excel, Store Registers) which had never been reconciled with each other, exacerbated by inability to carry out fair and accurate physical stock taking.

Outgrow Solution

With careful understanding of the state of affairs after close engagement with organization’s employees, the Outgrow team was able to deliver the following benefits to the client:

Ascertain the ageing of existing stock to enable strictest adherence to the FIFO principle through creation and implementation of advanced macros.

Identify non moving stock and planning for its liquidation.

Fix “Re-order Level” and “Minimum Order Quantity” for each Stock Keeping Unit (SKU) to ensure optimum availability of stock further enabled by Implementation of “Warehousing Management Solution”.

Work out a centralized and technology based warehousing with latest warehousing design, optimizing storage space required, minimizing inter-store merchandise transportation before ultimate dispatch to customer.

Financial Implications

As a result of the above initiatives, the client has been able to reduce its working capital requirements by approximately USD $ 500 K and add USD $ 100k to the bottom line.