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| Economic Performance |
| Sustainable SOURCING |
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Maintaining two months inventory
at Site with freight savings |
CASE STUDY |
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| OPPORTUNITY |
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| Maintaining 60 days inventory at site for the US market would enhance spot business opportunities and capture new business opportunities/ market share. |
| A 60 days inventory at site would also mean lesser transportation by sea resulting in transportation cost saving and a lighter carbon footprint. |
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| INTERVENTION |
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| Previously, products were being shipped to the US by sea route. Considering that the production lead time was 30 days, transportation lead time was 45 days and a safety factor (buffer time) of 15 days, the overall replenishment time came to 90 days. |
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| By design, these buffer calculations allowed us to maintain stock levels of 15-30 days at the site (as balance stock will be either in-transit or in production). |
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To meet market expectations of 45-60 days inventory at site and also to undertake sea shipments, we needed to add 30 days extra safety factor. So the overall realistic replenishment time came to 120 days.
We implemented the changed finished goods buffers in a phased manner based on input material and capacity availability at formulations.
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| OUTCOME |
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| During the first three months of implementation, we saved approximately INR 20 million by the sea freight plan and the overall savings on an yearly basis to be in the range of approximately INR 150 million. |
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