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G. Costa
Streamlining Inventory
G. Costa is a manufacturer and importer of a wide range of speciality foods from around the world, and has a product range of around 1,000 skus, including many well known brands. The company’s United Kingdom operation has doubled in size in the last four years.
The company has three manufacturing sites in the UK, one near Cambridge and two in Wales. In addition, there is a main warehouse at Aylesford in Kent. Inventory is closely monitored, with five buyers responsible for the placement of orders.
Tony Miner, G. Costa’s Purchasing Director recognised that, although the company’s IT system provided excellent historic information for the buyers, the forecasting capabilities were inadequate, basing projections on the average of the last eight weeks’ stock. He set a challenge to improve systems processes and buyer education in order to increase stock turnover and reduce by £1million the value of inventory held, whilst still keeping product availability above ninety eight per cent.
Davies & Robson was engaged to assist in this task, including a review of the inventory elements of G. Costa’s European supply chain and perform an efficiency audit in relation to:
Supplier Lead-Time
Order Frequency
Buying quantities
Sales Forecasting methods
Sku importance
Customers’ expectation
Supplier performance
Safety Stocks
Current Stockholding
Current Key Performance
Areas for improvement that will lead to lower stockholding and maintenance of availability targets were then identified. The improvements suggested were a combination of process improvements and buyer education. Process improvement, such as improved forecasting methods and system-suggested orders, were modelled using G. Costa’s historic data, enabling alternative processes to be evaluated.
G Costa’s Purchasing Director, Tony Miner said “Over recent years, the focus had shifted to attempting to achieve hundred per cent stock availability. The pursuit of always being in stock of the slow moving lines was causing us to hold higher stocks of the faster lines, which in turn caused our inventory value to increase. By concentrating on the stock levels and availability of the faster moving lines we have significantly reduced our stock and can still maintain ninety eight per cent availability”.
www.gcosta.co.uk
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