AmArA

An Inventory Optimization Case Study

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Highlights
  • 350,000 MRO items with extremely varied and dynamic demand
  • Added SO99+ to SAP ERP for MRO inventory optimization
  • Achieved large working capital ratio improvement

Project and Objectives

AmArA implemented ToolsGroup’s SO99+ solution for its MRO inventory. The company’s objectives were to:

  • Improve the level of customer service;
  • Reduce MRO inventory levels throughout the network;
  • Optimize and improve the purchasing and replenishment process
  • Optimize the logistical network;
  • Increase flexibility in inventory management to adapt to a changing market;
  • Reduce stock obsolescence.

Day-to-Day

SO99+ handles AmArA’s two-tier distribution network, which includes a central warehouse and 16 secondary storage sites. SO99+ manages AmArA’s 350,000 MRO inventory items with extremely varied and dynamic sales characteristics, a wide variety of markets, and restocking on a daily basis.

SO99+ maintains a very high customer service level, despite complex restocking requirements over three distribution networks. SO99+ also restocks between warehouses in order to avoid obsolescence of low turnover items.

Results & Benefits

  • An improvement in the customer service level;
  • A 38% working capital improvement; consisting of a 12% MRO inventory reduction in 6 months, combined with 22% sales increase;
  • Optimization of the replenishment process, thereby increasing the productivity of the Purchasing Department (10 people) and the planner; “Cushion” for the change of ERP from TOP to SAP;
  • Optimization of the two distribution networks.
SO99+ is now the system used to support and manage the diverse levels of company planning and parts purchasing.
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AmArA is a wholly owned subsidiary of Grupo Iberdrola, one of Europe's major electrical companies with assets in excess of US$ 20 billion, and a supplier of electrical and mechanical materials for the energy, gas, industry, construction and telecommunications industries. AmArA provides $230 million in MRO services to Group Iberdrola.

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