Insights

A Melbourne-based manufacturing company specializing in perforated sheets, mesh items, gratings, and stanchions used across a variety of industrial applications faced two major challenges. First, their entire inventory planning relied on a basic min/max system. Second, there was no formal inventory planning process in place.

After the merger of two companies, they were suddenly managing thousands of SKUs. We began by analyzing inventory utilization through stock turns. It quickly became clear that not all items behaved the same, so we separated high‑moving items from slow‑moving ones and developed an S&OP process starting with a demand plan based on separate forecasting models.

For high‑moving, made‑to‑stock items, we built a purchasing plan model using baseline forecasts, inventory position, inbound stock, and containerization constraints. For slow‑moving items, a strategic decision was made—together with the manufacturing team—to shift them to a made‑to‑order status.

By incorporating input from the state manager, we significantly improved inventory performance. Our measures resulted in net savings of AUD 11 million over two years. Better stock predictability increased stock turns from 2.1 to 3.2 within the same period.