Companies and their shareholders have become increasingly aware of the need to optimize working capital requirements. As a consequence, they are making determined efforts to minimize stock levels, while maintaining high service rates.

Moreover, this issue is also prompting companies to review their entire operational model, because poor quality stocks are often the result of deep-seated malfunctions.

Our experience leads us to think that the decisions taken when defining the configuration of the supply chain determine their cost structure, potential flexibility and stock levels to a considerable extent.

• distribution channels and service offer,
• storage and distribution network,
• product portfolio and complexity of the range,
• sourcing strategy, network of factories and suppliers,
• industrial flexibility and assignment of products to production plants,
• product design (delayed differentiation),
• etc.

The processes, organization and systems used to plan and manage the supply chain can also have an impact when they are not fully optimized and are no longer immediately accessible:

• multi-level optimization of stocks and the associated parameters,
• collaborative forecasting, integration of S&OP,
• push / pull arbitration,
• planning of products in transition,
• planning and scheduling of production with the application of constraints,
• integration of suppliers,
• etc.

Our role consists in supporting our customers’ teams in their programs to cut stocks in these different dimensions that inevitably involve cross-functional projects.

Argon Consulting helps its customers in:

• the identification of the challenges related to stock reduction and the estimate of the cost of overhauling the organizations and tools (business case). We have our own in-house optimization tools that were developed in the course of the numerous projects of this type that we have already managed. These tools can quickly assess just what is at stake and the levels of accessibility,
• the optimal positioning of the stock in the value chain (raw materials / components / packaging, semi-finished and finished products) and the selection of the best suited management principles by product range (on-demand / MTO vs. from stock / MTS, etc.),
• the definition of the optimal stock parameters (security, anticipatory or revolving stock), while attempting to differentiate the management methods according to the product family,
• the identification of levers of improvement by acting on the various components of the supply chain (reliability of forecasts, size of production series, complexity of the range, distribution network, reliability of suppliers, etc.),
• the management of plans to dispose of products that are obsolete or have very low turnaround rates,
• the optimization of product life cycle management processes (launches, end of life, etc.),
• the implementation of alerts, KPIs and scorecards,
• support for the implementation of the action plan to reduce stocks: application of recommendations to operations, tracking of actions and gains, etc.,
• the selection and possible implementation of inventory management tools (authoring of the specifications, management of calls for tender, deployment strategy, implementation assistance, project management and risk management, etc.),