Inventory Optimization at Leading eCommerce Company Achieves 12% Reduction in Inventory

Situation

The customer was faced with rapid growth in customer demand, bringing in a high service requirement. Cost optimization is important for reducing the supply chain costs and meeting the ever-increasing customer needs, but it made cost optimization a very complex exercise.

Impact

The existing network was sub optimal and not able to handle the requirements. The sub-optimal inventory holding led to high working capital and reduced service levels.

Resolution

ITC Infotech implemented the project with an optimization model with various service constraints and all the costs incurred by the organization. It arrived at the best model of operation and implemented the project in two phases with a differentiated service level and the multi echelon inventory optimization that helped in arriving at the right quantity of inventory to be held at different nodes in the distribution network.

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