Case Study: Rovers North
Client Overview
Rovers North is North America’s leading distributor of classic Land Rover parts, stocking over 10,000 SKUs. As the majority of their parts are imported from the UK, they experience long lead times. Many of their stocked SKUs are slow-moving, high-value items that are essential to keep in stock, despite low turnover. Before partnering with Glassoff Consulting, Rovers North was using basic inventory optimization models, with forecasting based on a simple rolling average.
Challenges
Long Lead Times
Due to importing the majority of their stock from the UK, lead times were a significant challenge for Rovers North.
Slow-Moving, High-Value Items
A large portion of their inventory consisted of high-value items with slow turnover, making inventory management complex and costly.
Outdated Forecasting Models
The company relied on a rolling average for demand forecasting, which did not account for seasonality or trends.
Lack of Key Inventory Metrics
Their ERP system lacked crucial inventory metrics, making it difficult for the purchasing department to make informed decisions.
Solutions Provided by Glassoff Consulting
Optimizing Existing Inventory Models
Rovers North had previously implemented statistical inventory optimization models, but they needed refinement. Glassoff Consulting fine-tuned these models through:
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Lead Time Calculations: Accurately accounting for the lengthy import lead times.
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Cycle Time Optimization: Ensuring the optimal balance between order frequency and stock levels.
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Service Level Optimization: Adjusting stock levels based on service goals to minimize stockouts without overstocking.
Advanced Forecasting Framework
Rovers North’s previous simple moving average forecasts did not incorporate seasonality or trends, leading to inaccuracies. Glassoff implemented advanced statistical and machine learning forecasting models to better capture demand fluctuations.
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The forecasts were fed directly into inventory optimization models to enhance stocking decisions, ensuring that high-value, slow-moving items were managed more efficiently.
Inventory Metrics Dashboard
Glassoff Consulting developed a custom dashboard to provide visibility into critical inventory metrics that Rovers North’s ERP system did not track:
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Fill Rate, Backorder Rate, Days of Supply, Historical Days Out of Stock
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ABC Analysis: To prioritize SKUs based on their impact on operations.
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Warning Indicators: To flag items needing special attention.
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Dead Stock and Overstock Metrics: To highlight inefficiencies and opportunities for stock reduction.
Comprehensive Documentation and Training
Glassoff Consulting created extensive documentation to ensure that the Rovers North team could understand and maintain the solutions implemented:
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Articles on how to interpret the results.
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Detailed explanations of the forecasting and inventory optimization models.
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Step-by-step instructions on how to implement the models in production.
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On-site training meetings to facilitate adoption and integration into the workflow.
Results
Improved Efficiency in Purchase Order Analysis
With key inventory metrics readily accessible, the purchasing department significantly reduced the time needed for purchase order analysis.
Better Informed Purchasing and Management Teams
The newly implemented inventory dashboard gave both the purchasing department and upper management real-time insight into the current state of inventory, improving decision-making.
Improved Forecasting Accuracy
Forecast accuracy improved by 22%, translating into a $3.1 million per year accuracy improvement, enabling more precise stock levels and fewer missed sales due to stockouts.
Seamless Adoption of New Solutions
The comprehensive documentation and on-site training ensured smooth integration of the new models into the Rovers North workflow, minimizing downtime and maximizing the effectiveness of the solutions.
Conclusion
By optimizing Rovers North's inventory models, implementing advanced forecasting frameworks, and providing a real-time inventory dashboard, Glassoff Consulting delivered tangible results. These improvements not only streamlined operations but also contributed to significant cost savings and better-informed inventory management decisions.