Avoid the negative effects of out of stock

Out of stock causes a ripple effect throughout the supply chain

Volatility in stock levels create headaches for businesses often leading to bullwhip effects.

Out of stock can cause production delays and disruptions in the supply chain, leading to late or missed customer deliveries and lost revenue.

When you see busy scheduling teams and planners reworking the plan for the very next days, it is likely due to a lack of the appropriate materials. They do this because they have no choice but to rework the whole production plan in order to keep production going as efficiently as possible (keep OEE high) (Overall Equipment Efficiency). A lack of finished products will lead to late or missed customer deliveries, and lost revenue.

Metronome can help you quickly and easily manage these issues, keeping your business on track and maximizing efficiency.

One of our customers was struggling with the sheer number of stock issues.

Everyone is the business knew the problem: overall stock level needed to decrease (too much working capital blocked in inventories). Yet, not enough stock was available for every reference so it was affecting customer' deliveries.

Essentially, the stock pool was not being appropriately balanced to protect service and optimize cost and cash across their 1000s of SKUs.

Indeed, day to day, people were fighting to get the stock in the door to keep the production running. Unfortunately, the important and less urgent process of ensuring the stock was not too high on other SKUs was deprioritized. So Finance was being more and more difficult to approve short term stock level increase to protect service.

Before Metronome, each out-of-stock needed to be looked at manually as information were scattered across different systems.

Planners and schedulers had to perform several data extracts and connect spreadsheets together every day. After that, they could start analyzing the situation. Typically only a couple people were able to perform this task rapidly.

Dealing rapidly with this every day used to be an art: one need to be good at extracting, connecting, cleaning data and quickly identify solutions. And then pull together the right stakeholders based on their informal knowledge of the business regarding who should be involved.

This was done through email threads, where supply chain folks needed to manually add people that would need to be involved with their current understanding of who does what in the organization. Without forgetting to attach the relevant information, with manual copy pasting of data, screenshots and other manually pulled together spreadsheets.

Often, the task would go undone for days until a big issues arise and the leadership team asking to reinstate the manual process to counter the performance decay onto production efficiency (OEE) and OTIF (On Time In Full).

All of it creating frustration for the few members of the team having to deal with these issues without appropriate tool nor time.

With Metronome, they moved to a new ways of working in just days, where an instance is automatically created for stock issues.‍

Our smart dispatcher applies the right priority, SLA and information from various existing systems and data sources. This means that everyone involved can quickly access the information they need to contribute to the solution with no human bottleneck to bring this to the surface. Indeed, things were visible in the ERP but only a few folks know how to access the information.

Results?

They reduced by 90% mails related to the day to day issues related to stock.

This helped them to reduce direct cost by 7% while improving responsiveness with their customers. Working capital is flat but OTIF increased by 2 points.

To report automatically on it, they have connected Metronome to their data analytics tool (Power BI in EMEA and Tableau in the US).

They also as far as sharing real time visibility with their top customers as part of their customer relationship program.

Stock level target is now based on real need to hit desired service level (as opposed to a top down reduction v last year which was common practice).

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How?

Metronome creates an instance for each stock risk and automatically involves the relevant stakeholders based on product categories, suppliers, factories, and key accounts.

This ensures that everyone has access to the information they need, without the need for emails or excels.

Metronome also dispatches larger risks to the relevant buyers and supply chain leaders to deal with longer-term performance management with suppliers and production groups.

Additionally, Metronome informs salespeople about potential impacts on their customers' orders.

This empowers them with additional information, such as alternative products they can propose to their customers to avoid affecting OTIF and NPS. Furthermore, routines for reviewing security stock levels were implemented to align the Advanced Planning Systems (APS) and the MRP to automate replenishment against the right levels.

Metronome tracks and records each challenge, allowing them to review their performance against SLAs and compliance standards. This allows them to continuously improve their processes and keep the business running smoothly, even in the face of stock volatility.

From delays to out of stock and forecasting spikes!

Metronome provides a centralized platform that consolidates all of your day to day challenge one place for end to end visibility.

This makes it easy for your team to quickly access the information and automation they need to deal with issues whether a high forecast spike or a supplier delays.