How We Helped Improve Service Level to 90% in a Complex Distribution Operation
Overview
We were brought in to support the inventory and supply operation of the Brazilian branch of a multinational company facing significant service level and inventory management challenges.
The operation was struggling with:
- frequent stockouts,
- inconsistent replenishment decisions,
- limited visibility into demand patterns,
- and low customer service performance.
Using data-driven inventory and demand analysis, we helped restructure purchasing and replenishment decisions, significantly improving product availability and operational efficiency.
Main Challenges
Inaccurate Demand Planning
Sales projections were primarily based on quarterly averages, making it difficult to respond to seasonality and demand fluctuations.
Frequent Stockouts
Insufficient safety stock policies and operational limitations caused recurring shortages of important items.
Low Service Level
Customers frequently received incomplete orders, negatively affecting satisfaction and reliability.
Inefficient Processes
The operation lacked clear inventory management metrics and supplier performance consistency.
Actions Implemented
1. Service Level and Inventory Metrics Review
We redefined the operational metrics used to evaluate inventory availability and customer service performance, creating a more realistic and actionable decision framework.
2. Demand Forecasting Improvements
A structured forecasting process based on historical sales data was implemented to improve replenishment decisions and reduce inconsistencies.
3. Inventory Policy Adjustments
Inventory parameters were revised considering lead times, demand behavior and operational constraints to improve availability without creating unnecessary excess inventory.
4. Purchasing Process Improvements
Purchasing workflows were reorganized and supplier performance issues addressed to improve replenishment reliability and responsiveness.
Results Achieved
Service Level Improvement
Within approximately 9 months, the operation achieved service levels close to 90%, significantly improving product availability and customer satisfaction
Sustainable Operational Improvements
Over the following years, inventory management and demand planning practices became fully integrated into the operation, creating a more stable and predictable supply process.
Long-Term Operational Impact
The project established a stronger operational foundation for future growth and improved alignment between local operations and global inventory management practices.
Practical Impact
This project demonstrated how structured inventory analysis, demand forecasting and replenishment policies can significantly improve operational performance in environments with complex inventories and irregular demand patterns.
Looking to Improve Inventory Performance?
If your company is facing stockouts, excess inventory or difficulties managing large numbers of SKUs, contact us to learn how data-driven inventory analysis can help improve service levels and purchasing decisions.