Addressing obsolete stock
A leading biopharmaceutical company faced substantial inventory write-offs of obsolete stocks of components and raw materials. To address this, senior management initiated a working capital optimization program focused on lowering high inventory levels tied up in working capital. Due to the organization’s decentralized structure, where individual production facilities operated independently, implementing this program required a structured and centralized inventory management approach.
Ambition: reducing inventory costs while maintaining supply stability
The opportunity to strengthen inventory optimization practices offered significant potential to reduce excess stock and minimize annual write-offs. The high decision making autonomy across production sites highlighted the need for a more standardized approach to inventory management, enabling greater consistency and efficiency. Collaborating with numerous stakeholders presented an opportunity to align objectives and ensure the successful implementation of the new program. A unified strategy was key to streamlining inventory management and unlocking working capital improvements.
How we helped
We helped the client develop a global inventory management policy and establish a centralized, end-to-end planning organization to standardize inventory practices across all production facilities. By leveraging ABC XYZ material classification and integrating SAP ECC for systematic inventory tracking, we enabled the client to achieve greater control and visibility. Through targeted stakeholder engagement and effective change management initiatives, we helped ensure alignment and adoption of the new practices. Key improvements included enhanced supplier forecasting, optimized inventory parameters, and updated MRP replenishment methods.
Results
The optimization program led to a significant reduction in inventory tied up in working capital. The newly implemented inventory management policy and optimized MRP parameters helped decrease obsolete stock and excess inventory. As a result, the company achieved more coordinated operations across its facilities and fostered a stronger culture of inventory discipline and operational alignment.
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