Steel inventory assessment
What they asked
Our client is a global steel manufacturer with a history of mergers and acquisitions. The company has a complex supply chain with over 35 interlinked assets spread over six countries. They had a product funnel that expanded rapidly after initial slab casting. A new strategy involved three key improvements which were (partly) at odds with each other: better service, lower cost and reduced inventories. The client asked us to redesign their supply chain network and optimise their working capital.
What we did
We analysed the end-customer demand profile which we translated through the supply chain. We designed differentiated fulfilment strategies which better link customer requirements to a complex manufacturing footprint. To ensure service and capital efficiency, we calculated optimal location and levels for steel inventories. For decision-making purposes, we made the trade-off transparent between inventories and service.
What we accomplished
We implemented a new concept for a rationalised European supply chain. We established a significant improvement of service levels and the reliability towards the customers. At the same time, the new concept resulted in an important reduction of working capital. In addition, the new concept allowed a reduction in cost per ton by making better use of lowest cost routes.