Multi-echelon stock inventory optimization
The complexity of BIC’s European supply chain, with European and overseas factories, global sourcing, distribution centres and co-packing significantly complicated inventory management. Achieving the proposed inventory in order to guarantee the expected service level to BIC’s customers requires constant supervision.
Dependent and independent demand have been incorporated in the inventory model
In view of the large number of SKUs, Möbius decided to tackle the European network’s complexity with a so-called multi-echelon inventory model, incorporating independent (market-driven) demand and dependent demand (of components).
Möbius used factors such as variability and the margin of error of the sales forecast to mitigate demand uncertainty.
At BIC’s request, Möbius redefined the inventory levels, using service levels and the constant control of the inventory target to achieve this.
The introduction of constant recalculation
As a result of this first phase of calculations, BIC decided to upgrade its inventory calculation parameters to retain the added value of a regular review of the inventory target. Möbius assisted BIC for several years while this constant recalculation process was rolled out.
The profits on the European stocks were significant. These profits in the short term influenced the initial dimensioning, in the long term the benefits of a quarterly upgrade of the inventory parameters became apparent.
In addition to improving service levels and inventory management, Möbius's assistance contributed to increasing our employees' competence in these matters.