Wire and rope manufacturer Haggie Rand, a fully owned subsidiary of JSE-listed Haggie Limited, has reported savings of millions of rand in 12 months since installing Ixchange`s inventory process.
Logistics manager Alex de Sousa says the 16 local branches were previously overstocked because of lack of focus in the management of demand and inventory.
"We didn`t stock our branches correctly," De Sousa says. "We had to reduce inventory while maintaining customer service levels and improving coordination between production and national distribution."
Because Haggie Rand`s production and distribution planning was decentralised, stocking was haphazard, with little co-ordination between distribution and manufacturing. This led to a need to consolidate planning resources and centralise demand and inventory systems.
Ixchange`s software is installed at nine sites in Haggie, connected via a WAN. "It has enabled us to improve sales forecasting for all regions, improve coordination between production and distribution, and improve distribution efficiency."
Hawk is used for decision support, making recommendations regarding stocking and procurement. It operates against a Cobol-based host that processes operational/transactional data such as sales history, orders, supply and stock data.
"Inventory policy, including the trade-off between safety stock levels and customer service levels, is preset," says De Sousa. "It is highly effective, reducing the work involved in managing thousands of stock-keeping units."
Hawk`s benefits were realised within 12 months of implementation. Using time-phased system-generated stock and sales forecasts, Haggie met its targets each month.
"We sustained 30% reduction, as predicted, in distribution inventories, 50% reduction in manufacturing of general engineering rope stocks, and reduced lost sales by 50%, totalling savings of millions of rand," he says. "Further, we managed to maintain, and improve, our customer service and demand levels despite stock reductions."
The company resolved a series of business issues by bringing together representatives from its sales, marketing, production, planning and distribution divisions, re-forecasting sales and analysing stocks using Hawk`s coordinated forecast data.
"Because we worked from common ground, business decisions were made jointly, and we could confidently resolve our differences by focusing on collective business problems," says De Sousa.
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