Optimizing Inventory Management

An inventory reduction project was executed at a leather products manufacturing company to reduce the cost associated with the raw material inventory. The project included studying the produce demand, variations due to seasonality, negotiations with the suppliers for time and cost, consolidation of suppliers for a tighter and integrated value chain and Just-In-Time principle. As a result of the project the raw material inventory value was reduced by 45% from INR 10,00,000 to INR 5,50,000. This initiative freed up capital, improved efficiency, and maintained customer service levels without increasing the stockouts.