A Supply Chain Planning Case Study

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  • Global manufacturing, sales and distribution network for 10,000 items
  • Inventory optimization drove segmented customer-service levels
  • Improved service levels with less inventory

Project and Objectives

Despite having undertaken service improvement and logistics planning projects in previous years, Bellota decided to review its products with the goal of determining a new indicator: the Availability Rate (i.e., Customer Service Level). In addition, they were dealing with a changing business environment and wanted to achieve several other objectives, including:

  • Increase the total of items (both manufactured and distributed) to 10,000
  • Improve inventory management of products purchased outside the company, which had longer lead times and larger batch sizes
  • Improve handling of items with low or extremely low turnover
  • Differentiate service levels for different types of customers
Bellota implemented ToolsGroup’s SO99+ solution first to measure the Availability Rate worldwide for its products, then to adapt their supply chain planning process to optimize the relationship between inventory and service level across their entire inventory mix. SO99+ was also deployed to disaggregate sales forecasts, which were too high level for their daily inventory planning needs. 

Results & Benefits

After implementing SO99+ and after just four months of continuous operation, Bellota achieved its objectives:

  • The Availability Rate (Customer Service Level) for all its products worldwide was increased from 93% to 96%
  • Total inventory was reduced by 14% despite increased availability
SO99+ also enabled Bellota to enhance the reliability of its forecasts, including medium and long-term forecasts agreed upon with the Marketing Department. Finally, SO99+ is used as a strategic support tool for evaluating the cost of inventory versus service level when making operating decisions. Based on their results, SO99+ is now being implemented in other CPE companies.
Bellota manufactures hand tools for the farming, garden and construction markets. The company has sales of $210 Million and is part of the CPE Group. It has eight plants in the US, Spain, Mexico, and South America, and sells its products present in 120 countries around the world.

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