Inventory Optimization Consulting Project Delivers Significant Improvement for Leading $100M Distribution Company

The Challenge

A $100M company, backed by a middle market private equity firm, focused solely on distributing industrial spare parts from seven warehouses with over 25,000 stock keeping units (SKUs). The company retained TriVista to assist with optimizing their inventory positions across all sites.

Our Approach

• Analyzed current state sales revenue and margin, demand variability, impact to business, and inventory positions
• Performed detailed process mapping of all departments impacted by future inventory changes to ascertain impact and risks to inventory rebalancing
• Developed robust inventory optimization model resulting in 20+ different inventory models indicating trade-offs of freight costs, fill rates, inventory values, and one-time capital investments
• Developed detailed migration plan, risk assessment, and mitigation plan for transition to new inventory positions
• Created standard operating procedures (SOPs) and detailed training documentation to ensure proper handoff and long-term implementation

The Results

• Developed inventory position to take company from stocked 80% fill rate to 98%, and total fill rate from 64% to 82%, with a 10% reduction in long-term inventory
• Identified required inventory investment and transfer opportunities
• Developed E&O inventory calculation model