Inventory Management has never been so important to get right

Nearly two years into her role at TVS Supply Chain Solutions (TVS SCS), Head of Rail Procurement Colleen Hawkins talks about what can be done differently in managing a tricky rail supply chain and how they are able to deliver better performance from less inventory.

What does a successful inventory management system deliver? What are the key measurements of success? These are some of the questions that I have asked myself since joining TVS SCS. To me and my colleagues at TVS SCS, we believe that Inventory Management is about achieving the highest level of availability for your money; using expertise, systems, and processes to ensure your inventory is accessible, available, and affordable.

The balancing act of keeping availability high whilst keeping inventory costs low is one of the difficulties of running any business. Conventional wisdom is that you can’t achieve one of these objectives without adversely affecting the other but at TVS SCS we’ve been able to do both over the last 18 months.

The answer to the conundrum is simple – blending modern technology and algorithms with a team of supremely talented supply chain professionals.

We utilise our in-house demand forecasting planning tool (DFP), which takes our demand history and automatically identifies trends and seasonality in the data, which is then forecast into the future. We then calculate appropriate reorder levels and reorder quantities to give the desired availability. New parts, supersessions and demand consolidation are handled automatically.

This is all done at scale, to regular schedules, and fully integrated into the TVS SCS suite of applications. DFP also automatically identifies issues with parts that need to be investigated, for example, a sudden increase in demand, or a structural break in the demand pattern. Our teams of supply chain planners investigate and decide the appropriate corrective action.

We also incorporate long-term life cycle data, which can be invaluable for increasing forecast accuracy and optimising inventory. This data might be historic vehicle parc data, future sales growth plans, or end-of-life modelling and forecasting as parts near the end of their aftermarket life.

Using this technology, we can also fully simulate the effects of changes before they occur, conduct “what-if” analysis, or calculate the extra inventory required to increase service levels.

All these factors, along with continuous improvement projects undertaken by our supply chain teams have seen us demonstrate industry leading performance while our stock levels have reduced. We are keeping the right stock at the right time to ensure that we can deliver benefits to the supply chain which is even more critical with the launch of TVS Rail Spares in June.

Our challenge is to ensure that we maintain exceptional availability levels with the increased demand and we’re looking forward to rising to the occasion.

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