How We Improved Inventory Efficiency and Customer Service for a Multinational in Brazil
Introduction
A European multinational faced significant challenges in reducing inventory levels and increasing inventory turnover in its Brazilian operation, aiming to meet the company’s global standards. Although the planning system was used consistently across all regions, it was not performing as expected in Brazil, directly affecting customer service and operational results.
Challenges Identified
- Fragmented customer service:
The published service level reflected second‑attempt fulfillment, which exceeded 90%. However, first‑attempt fulfillment was only 70%, causing dissatisfaction due to lead times of up to 15 days for items sourced from other warehouses. - Complexity in calculating safety stock:
Inventory management relied on manual adjustments for 50,000 items, while the planning team faced time constraints and limited expertise. - Operational shortcomings:
Planners lacked the in‑depth knowledge required to use the system effectively.
Solutions Implemented
- Service level redesign:
We began measuring customer service exclusively based on first‑attempt fulfillment, prioritizing speed and customer satisfaction. - Strategic item classification:
Items were grouped by cost, order frequency, and revenue impact. Specific policies were created to define safety stock levels by item group and warehouse. - Monthly monitoring:
We introduced monthly warehouse‑level lists showing the turnover of each item. The sales team began focusing on low‑turnover items without compromising those performing well. - Training and optimization:
Planners were trained on the new policies, ensuring efficiency with the existing team. - Cross‑department alignment:
Monthly meetings involving sales, finance, and planning were established to review KPIs and define actions aligned with customer needs.
Results Observed
Although our engagement concluded before the full impact of the low‑turnover initiatives, we observed a significant improvement in first‑attempt customer service — resolving one of the main sources of dissatisfaction. The company consolidated more agile and structured practices, laying the foundation for consistent results aligned with global standards.
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