Supply Chain Dilemma

An MSME company, having manufacturing plant and catering to healthcare segment, known for its quality products and customer responsiveness.

Strength of the Client

Products with competitive technology, significant presence at government health segments, good distribution network in India, brand loyal customers, exporting the products

Challenges

• Frequent Working Capital constraint

• Frequent complaints on product shortage and hence unable to cater within committed lead time

• Receives Orders for unstocked inventory on one hand and manufactured products remains unsold resulting inheavy blockage in inventory and loss of sale – a paradoxical situation

• Repetition of work at various sections

• Different data available with different departments, creating confusion on which way to adopt OR how to resolve the issue of supply chain

Spanyan Business Assistance

A. Brought organisation on Single Platform

• By channelising discussion, understood the expectations of each section of supply chain and customers

• Standardised various terminologies across the board for unambiguous interpretation

• Established the turnaround time of each process creating consensus among all stake holders

• Included effect of seasonality in business forecasting and planning

• Derived key accountabilities of each section, identified dependencies

• Finalised formats for forecasting

B. Trend analysis and norm fixation

• Analysed past trends for expired products, loss of sale due to product unavailability and derived safety stock mechanism

• Established frequency and inventory turnover ratios for monitoring the finished products

• Identified reasons for unfavourable ratios

• Identified process of decision making towards short expiry products and formalise the mechanism for scheme management towards existing near expiry products liquidation

C. Inventory Analysis

• Categorised fast, slow and non-moving inventories at raw material stage and work in progress stage

• Streamlined vendor lead time and purchase terms &conditions

• Fixed the norms of purchase triggers

• Fixed the responsibilities for goods inward, quality acceptance

• Brainstorming on non moving inventory liquidation and ideas for implementation

• Trend analysis on Various finished products SKUs and revenue generation through it

• Found balance between revenue generation/ margins Vs working capital blockage due to its low movement

• Explored full potential of the supporting software

Outcome

• Transparency in supply chain

• Timely and better/ well informed forecasting

• Significant reduction in further blockage of unwanted/ untimely inventory

• Less Blockage of working capital /Faster Inventory Turn around

• Better control over delayed product supply

• Better adherence to commitment to customers / distributors for product availability