Alaska Communications had a problem getting product to customers through their retail stores. Although inventory levels were high, the stores couldn’t seem to get the right product to the right place at the right time, and were having trouble filling orders for their customers in a timely manner. Inventory throughout the retail store network was over $6 million, materials costs were higher than desired, and inventory management in the central distribution warehouse was suffering. Multiple stores located throughout Alaska made the situation even more complex.
We worked together to implement a Kanban auto-replenishment system between the warehouse and the stores. The Kanban system was comprised of a two-bin arrangement at the stores that was replenished from the main warehouse. After calculating the Kanban size to be sure the stores had what they needed when they needed it, we moved the excess inventory back to the warehouse. This allowed the purchasing department to have a clearer view of product demand and velocity, allowing buyers to make better decisions. Another great example of accelerated profit and growth through improved inventory management.
• The stores’ fill rates shot up to 98% even with worldwide allocations of products causing some bumps in the road for the warehouse
• Overall inventories of wireless products were cut by over $3 million in just one year
• Customer service rates have remained in the high 90 percent range, and materials costs have plummeted.
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