In Transit Out Inventory Reduction – Medical Device Manufacturing Company
The client was experiencing inordinately high levels of In Transit Out Inventory. Intransit Out Inventory is inventory which has shipped but has not yet reached its revenue destination. Rasdal Associates was engaged to lead a project team to reduce Intransit Out Inventory and establish processes to keep the level low into the future.
Action
The first order of business was to build a cross-functional project team. This inventory category was impacted by the activities of several different functional areas within the company.
The team systematically identified root causes and enacted policies and procedures to address each process break down. These changes required cross-functional buy in and cooperation in order to work effectively. Objectives were clearly defined and measured for each initiative. Training was designed and implemented to facilitate adoption of the new methodologies within each functional group.
The emphasis throughout the entire project was on identifying root cause, specifying corrective action and most importantly determining preventative action. It was as important to reduce the current Intransit Out Inventory level as it was to keep it down moving forward.
Results
Intransit Out Inventory was reduced by $20 million dollars. Several new processes were implemented as part of this project which resulted in efficiencies in other areas as well.