Finding a Formula for Success
Getting the right product to the right customer location at the right time is key to commercial success for any company. But with more than 6,000 product lines across 13 business units and operations in 90 countries, this is a challenging task for DuPont. In the new consumer-based markets that DuPont has entered, such as food and related ingredients, it is critical to react quickly and dynamically and respond appropriately to fluctuating demand. But, their reliance on manual forecasting spreadsheets and a static approach to demand planning meant it was time to take a more scientific approach to inventory planning, looking at historical data to update safety-stock targets more regularly.
The company decided to integrate its inventory management using SAP Enterprise Inventory Optimization. As a result, it has reduced costs by cutting excess safety stock while improving customer service. With SAP Enterprise Inventory Optimization in place, business units at DuPont can now view a network model of supply chains for over 2,000 product lines. The solution looks at the entire supply chain and identifies the current amount and location of each item of stock across the chain. It then calculates optimal safety-stock targets required to meet demand without running out of stock, while fulfilling customer service targets for timely delivery.
DuPont has achieved significant savings: their Packaging Graphics division has benefited from an 8 percent reduction in inventory, the MCM Resin division has significantly improved customer service levels across its supply chain, and the HPF business anticipates cutting its inventory by 5 percent. According to DuPont, the SAP solution is helping them to be more competitive – and sustain that edge in fast-moving consumer markets.
Take a look at what DuPont is accomplishing: