Import Management

Client / Profile:

International Paper Supplier supplying local retailer

Issue:

To obtain better first margins the local retailer moved supply from a local manufacturer to a Russian paper mill, with it being critical to remain in stock. The physical supply chain required railing the order across the North of Europe to Finland and multiple shipping legs through Asia to Australia. Lead-time all up being over 5 months from order placement to warehouse receipt.

Key issue was to remain In-Stock at all times without sacrificing stock-turns.

Cause (Benefit):

The retailers existing inventory planning worked on a one week time horizon. Buying from local suppliers only, and therefore having very short lead-times hid a lack of forward planning.

Response:

Implemented a weekly status report to highlight any potential future in stock issues, with accompanying recommendations. Used price as a lever to dampen or ramp up demand.

The status report was populated from Inventory Planning data and showed closing stock positions in weekly buckets for the next 26 weeks.

Outcome:

Full in stock maintained with acceptable stockturns and supporting significant promotional activity.

Learning:

Forward visibility and the decision support tools to react appropriately to sales variances are critical for long lead-time sourcing.