Challenge

A leading IT company witnessed increased cost on their purchase of spares and consumables. They approached our team to carry out an assessment on their practices and suggest opportunities for cost reduction.

JEN SOURCE SOLUTION

  • Team conducted a comprehensive study on the data of Procurement, Issue, Utilization and its pattern.
  • Utilization patterns were analyzed for variations.
  • Focus was prioritized on high, Medium & Low Utilization, dead stock inventory items and their cost contribution
  • Analyzed their procurement trend as well as process of decision to purchase
  • Analyzed inventory holding cost, Lead time for delivery
  • Identified measures to improve the processes of holding inventory, minimum reorder level, decision to purchase, consumables not required in future, bulk replacement etc.,
  • Implemented measures including sale of dead stock which are not required in future
  • Established controls to sustain and ensured tracking mechanism.

Results/Benefits

  • Achieved 50% reduction in the inventory holding cost
  • Improved Purchase practice resulted in savings closed to INR 5 Lac per month
  • Sale of dead stock items resulted in better utilization of stores space
  • Strong process to Decision,  Order, Issue, Utilize and Report