A high-tech manufacturing client operating in a volatile market faced a staggering increase in inventory value over two years. This led to simultaneous overstock and understock situations, creating inefficiencies and interdepartmental friction. Miebach was brought in to uncover the root causes, propose actionable solutions, and transition findings into measurable results.

Understanding the Complexity

A high-tech manufacturer in a volatile market faced overstock and understock issues simultaneously, disrupting operations and frustrating customers. Departments were faced with inefficiencies, pointing fingers as problems were blamed on individuals instead of systemic flaws.

The company’s complex, high-value SKU portfolio only amplified the issues. To improve the situation, Miebach stepped in with a clear mission: uncover the root causes, implement targeted solutions, and bring inventory under control without compromising service levels.

Data-Driven Insights for Tangible Results

Miebach’s approach centered on leveraging Data Mining techniques and introducing a Target Operating Model (TOM) to drive sustainable change. Key steps included:

• Root Cause Analysis:
  Identified systemic issues behind excess and insufficient inventory
• Demand Variance and Promotion Analysis:
  Assessed inconsistencies in demand patterns and promotional impacts
• Overstock Evaluation:
  Highlighted inefficiencies in order volumes due to crisis-driven adjustments

Transformed Challenges into Opportunties

The analysis revealed an overstock of 55%, with actionable insights driving targeted measures:

• Operative Order Management (10-15%):
  Temporary supply shortage led to excessive ordering without corrective mechanisms
• Risk Management (20-25%):
  Inefficient stockpiling practices lacked system support for optimization.
• High Demand Variance (20-25%):
  Manual demand forecasts resulted in low-visibility discrepancies.

Based on a detailed data mining, the introduction of a Target Operating Model enabled the company to not only reduce overstock but also built a sustainable framework for future inventory control.

Stay tuned for our next inventory case study article about how an Inventory Control Tower can transform inventory management.

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