Development of a production and inventory management model.
Our experts were tasked with developing a production and inventory management model that would improve the level of availability of goods and reduce inventory surplus.
According to the preliminary analysis of activities, our experts identified two key factors affecting on the financial performance of the enterprise.
The first one is a limited period of products’ sale along with differences in production time and time order. The average production cycle of a product takes 48 hours, the time of shipment of finished products – 48 hours. It caused two interrelated problems associated with unclaimed products production and “lost sales”.
The second factor is certain terms of cooperation with suppliers of raw materials, which determined the process of replenishment of inventories without considering actual demand for finished products, which in turn, contributed to the accumulation of excess stock of products and led to significant financial costs in the future.
Taking into account these factors, our experts concluded that it was necessary to conduct an integrated evaluation of the enterprise, starting with the model of interaction with suppliers and completing the analysis activities of various functional units.
Currently, all major work is completed. New processes for planning supply of raw materials and production, focused on the actual level of demand, have been developed and implemented.
Supply chains optimization, based on a new logistic model and information solution, which made it possible to digitize the movement of the main material flows and conduct advanced analytics of the production process, in order to calculate and forecast the most profitable production nomenclature.
Modern cost accounting methods were used for calculations, in particular, throughput accounting. Nowadays, this methodology is implemented at the enterprise and used in operational activities.
Thus, modern production management tools have been adapted, taking into account technological constraints and the dynamic, unpredictable demand of our Customer.