Customer's Issues

Being a multi-product company, we need to correspond to considerable demand fluctuation of each product, not to mention to meet deadlines without any fail, all of which resulted in large stock of inventories and finished products. As the storage tank was being used close to its limit, we started to consider facility investment.

Point of Improvement

We specified a safety inventory capacity for the intermediate products that can be used for various products, and decided to produce them to supplement the capacity. We also decided to waive the work process between intermediate to final completion of products until we receive customer orders, so that all production schedules are planned based on a delivery date.

Benefits

While satisfying delivery dates, we were able to reduce inventories by 40%. As a result, we were able to avoid unnecessary facility investment, since we didn't need to build additional storage tanks anymore. Also, we succeeded to shorten the manufacturing lead-time of products with volatile paint materials, which led to less volatile loss and resulted in reducing the cost of the product.