Inventory Reduction Project  

 

In value Chain, total inventory is reduced from 320 to 220 million TL. 

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OPPORTUNITY

Inventory is an essential asset for a company. Right inventory

at the right place where demand exists is even more

valuable. Nevertheless, inventory also means a cost for

company at interest rate level. Therefore companies focus

on reducing inventory levels. The objective of this project

was reducing inventory level using Six Sigma Tools and

methodology. In this project, to keep inventory reduction

sustainable, plenty of sub-projects are created. Some of

them are, enhancing forecasts, optimizing replenishment

periods, optimization of order cycles, eliminating obsolete

stocks, and reducing SKU counts. Inventory structure and

placements are investigated in this ceiling project’s scope. 

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EXECUTION

After building the team and gathered project charter signed,

the structure of inventory is investigated. This is made by

Pareto Charts and data analytics that visualize inventory

levels in categories, SKU’s and locations.

From forecast project, enhanced forecast levels are taken as

inputs. Then, low demand and high inventory products are

determined and exported to the SKU minimization and

Obsolete Stock projects.

In this ceiling project, the company started to speak common

language. Metrics are aligned, associates and executives are

convinced regarding sustainable inventory reduction, which

was crucial to inhibit purchasing and storing tendency. 

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CONCLUSION

The inventory level of the company is reduced from 320

million TL to 220 million TL, which correspond to 7 million TL

($3 million) interest savings from asset.