THE CHALLENGE

A personal computer manufacturer authorized Q·Media to procure 90 days of components to enable large volume economical purchases. The challenge was to ensure:

• The correct number of components was available at the beginning of each month;
• Inventory and excess and obsolescence (E&O) required strong management to ensure demand could be met and costs managed;
• The customer provided a 13 week rolling forecast updated on a weekly basis. However, they wanted to reduce their inventory exposure from 13 weeks to 4 weeks without affecting their suppliers’ ability to respond to ever-changing demand.

As an additional challenge, the customer would frequently re-schedule demand from the end of the month into the first two weeks of the month. This presented additional challenges, given that forecasts typically arrived two weeks into the month and the production schedule was not available until several days into the month. Thus, the forecast and the schedules were of little value in adjusting material delivery and analyzing changes.

As a result, Q·Media and the customer alike were constantly questioning data integrity and scheduling, since reports and forecasts were neither timely nor accurate.

THE SOLUTION

Q·Media’s solution was to generate a detailed analysis of the customer’s forecasts, inventory and ordering processes. Simultaneously, we established a direct line of communication between the various materials departments to quickly resolve issues of data integrity, forecasting and delivery. This allowed the numerous materials departments to jointly communicate concerns and manage feedback on potential issues.

By streamlining these communication and production channels, the customer and Q·Media alike were able to obtain information that was accurate and timely. The result was far more reliable delivery schedules throughout the forecast period, thereby reducing inventories and maintaining economical purchase quantities.

A more transparent and streamlined management system allowed Q·Media to more effectively manage procurement and inventories, particularly for products that were being phased out. Additionally, swings in demand could now be identified immediately, allowing for substantial reductions in expedite costs and costs related to out of stock items.

Q·Media was able to:

• Evaluate trends, forecast loading and demand changes to uncover process issues that created false demand information;
• Reduce expedite and excess and obsolescence costs by up to 90% and ensure timely delivery of product to market.

Q·Media and the customer were both able to lower their respective inventories while maintaining economical purchase quantities.