Intern spotlight: Visual inventory management crisis

August 2, 2019

One of our interns shares the highlights of one of his summer projects with an automotive client.

SITUATION:

A tier-one automotive supplier was having trouble accurately tracking inventory of their powertrain sensors (PTS) as well as their powertrain sensor holders. When we arrived, these parts were being stored in a warehouse away from the assembly line.

Operators would come retrieve the necessary parts as needed without properly documenting the outflow of these parts. Due to the lack of accurate inventory, the parts were being overproduced and stored in excessive quantities in the warehouse. I was tasked to correct this issue alongside a senior consultant.

APPROACH:

After analyzing the situation, we determined the best course of action would be to implement a visual inventory management system. To complete this project, inventory racks were to be built and labeled properly with the inventory being transferred from the warehouse to the new flow rack location within the new system.

Using statistical analysis studies to determine the frequency of use for each PTS variant, we allocated rack space according to forecasted demand.

Operators were educated about the new inventory system and how to properly document the inventory outflow so that the parts were not overproduced upstream. Once the racks were complete, they were then moved near the assembly line so that the operators could retrieve the parts as needed.

RESULT:

With the changes properly trained upon, we observed the process and handled minor kinks with the new visual inventory management system.

With inventory accuracy ensured, the PTS production team saw immediate benefits as they were able to reduce production quantities.

Operators were supplied the necessary parts as needed, resulting in a reduced lead time for PTS sensor and holder installations. Production staff who kitted these parts also benefitted as they had the correct quantity of parts needed as well as an identifiable inventory location.

FINAL THOUGHTS:

This was an extremely beneficial project for me to partake in alongside a senior consultant as I saw the benefits of a visual inventory management system in a multitude of ways. This project exposed me to real world problems in the automotive industry while giving me another tool to potentially use throughout my career.

About Seraph:

Seraph’s team of operational managers and senior consultants intercede on behalf of our clients to fix a crisis that is putting the business at immediate risk; turnaround a situation that is damaging the bottom line; or to restructure and improve the balance sheet. Seraph has successfully delivered projects in the following regions: The Americas, Europe, China, and India. Seraph’s Industry Expertise Includes: Aerospace, Automotive, Energy Infrastructure, Healthcare and Medical Devices. Through our other operating companies we are constantly looking for distressed situations where we can put our expertise and capital to work in order to create value.

About Seraph 

A global enterprise consulting firm that partners with business leaders to handle their most complex problems in areas such as supply chain, operations, and manufacturing challenges while delivering long-term operational and leadership improvements. Seraph has extensive on-site industry experience in the automotive, private equity, defense, medical device, electronics, energy infrastructure, and engineering sectors. The Seraph leadership team brings vast expertise across; crisis management, mergers, acquisitions, due diligence, restructuring, turn-around services, product launches, and logistics. Our four-phase process has been proven to provide quick payback and positive ROI, which is measured throughout customer engagement. Learn more at www.seraph.com and follow Seraph on LinkedIn.

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