ITW (Krafft)

A Supply Chain Planning Case Study

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Highlights
  • Addressing a wide range of products and sales channels
  • Developed cross-organization consensus building platform
  • Significantly improved service and cut slow stock by half

Project and Objectives

ITW’s Krafft division implemented ToolsGroup’s SO99+ software to plan its supply chain, aiming to improve service levels and optimize finished goods inventories.

A second goal was to allow the planning department to generate a Master Production Schedule (MPS) that could drive the company’s ERP-generated Materials Requirements Plans.

They also hoped to improve sales forecasts by involving the sales department and establish a process for creating company-wide consensus on segmented service level targets.

Day-to-Day

Krafft now uses SO99+ to manage all of its approximately 2000 items in different product ranges (anti-freezes, vehicle maintenance, lubricants, industrial greases, sealants, garden products) and aimed at different sales channels (hypermarkets, hardware stores, spare parts stores, service stations, home improvement stores, construction, industry, export).

It plans the distribution network made up of a factory, central warehouse and three regional warehouses.

The SO99+ planning system is interfaced with the company’s BPCS system.

Results & Benefits

During the first few months, Krafft quickly increased service levels while keeping the inventory level. Soon afterwards the company achieved:
  • A 10 percentage point increase in service levels, now at 95%
  • Reduced inventory from 2.5 to 2 months of sales
  • Reduced delivery lead times
  • Cut slow moving stock by 50 per cent

The new approach simplified the planning process and created several additional benefits. Logistics personnel spend less time on routine tasks and have more time to focus on value-added activities. The sales department is now involved in preparing forecasts for each item. And the process has allowed the company to develop an in-house consensus on service levels and inventories by products groups and sales channels.

Krafft’s planned next step is to is target overall service levels above 95%.

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ITW is a $15 billion company that designs and manufactures fasteners and components, equipment and consumable systems and a variety of specialty products and equipment.

It’s Krafft division was founded in 1953 and acquired by ITW in 2004. Krafft develops, manufactures and markets chemical products for the automotive industry and construction sectors. Krafft distributes its products to more than 60 countries across 5 continents.

Krafft has sustained consistent growth over the last few years, both organically and via acquisitions, and is currently generating about $110 million revenue..

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