Project Overview
Project: Inventory Management & Consumption Process Review
Client Profile: The client is a leading bakery company in the Middle East, operating in 7 countries with 10 plants and 25 depots. Their inventory is spread across multiple locations in Saudi Arabia.
Challenges
- Lack of Coordination: There was no proper coordination between the demand team and the production-planning team. This led to the absence of a structured method to calculate how much finished goods should be produced and the raw materials required to process the same.
- Inventory Aging Issues: The process for monitoring inventory aging was nonexistent, resulting in frequent purchases of items already in stock for more than 365 days.
- BOM Compliance Problems: The Bill of Materials (BOM) was not followed consistently, causing short/excess material usage during production. This was compounded by the lack of standardized accounting procedures and policies.
Solutions Provided
- Defined Timelines: We defined timelines for each activity in the production cycle, starting procurement procedures two months before the production date. This avoided delays in receiving raw and packing materials. The procedure was integrated into the ERP system to eliminate manual interventions.
- Aging Report Implementation: Developed an aging report to inform stores about items lying in inventory for more than 365 days but still being purchased by the procurement department. This report is now shared and monitored weekly.
- Consumption Report Monitoring: Monitored consumption reports weekly, updating discrepancies to plant managers. This enabled regular updates to BOMs, ensuring they were revised and accurate in the system.
Partnership with BSS – Key Benefits
BSS collaborated closely with the client to implement a comprehensive finance and accounting (F&A) solution that addressed the major challenges. The key steps included:
- Defined Roles and Responsibilities: Clearly established Service Level Agreements (SLAs) and RACI (Responsible, Accountable, Consulted, Informed) roles to ensure operational excellence.
- ERP Transition: Ensured a smooth and successful transition to ERP without causing any disruption to the business.
- Support for Digitization: Assisted with digitization initiatives to automate time-consuming manual processes.
Outcome
Through these initiatives, BSS helped the client optimize inventory processes, reduce inefficiencies, and achieve greater operational control.