With most parts of Canada on lockdown due to the COVID-19 outbreak, many industries are looking at a chain reaction of unprecedented changes. And, the Canadian chemical industry is hardly an exception. The economic impact of the COVID-19 outbreak on Canada is far-reaching. As such, Canadian chemical companies are in the need to take actions to ensure they remain afloat in this challenging time. Besides, chemical manufacturing companies in Canada must thoroughly monitor the current situation and respond accordingly by implementing business continuity plans.
This success story highlights how our inventory management solution helped a Canadian chemical industry client to create transparency on the multitier supply chain, estimate the inventory along the supply chain, devise a demand-forecast strategy, and manage cash and net working capital.
Supply chain leaders in the Canadian chemical industry must ensure the dynamic monitoring of forecasts in order to react quickly to inaccuracies. Our market intelligence experts can help you achieve this strategic objective. RFP here.
Business Challenge
The client is a chemical manufacturing firm based out of Canada.
A Canadian chemical industry client faced challenges in creating transparency on the multitier supply chain, estimating available inventory along the value chain, assessing realistic final customer demand, and securing logistics capacity owing to the COVID-19 crisis. Also, the Canadian chemical industry client faced difficulties in developing a demand-forecast strategy, obtaining realistic insights into base chemical products demand, and ensuring dynamic monitoring of forecasts in order to react quickly to inaccuracies caused by the COVID-19 outbreak. Consequently, the company encountered a huge decline in profit margins. The client, therefore, wanted to take immediate end-to-end supply chain actions to combat the impact of COVID-19. They sought to collaborate with Infiniti Research to leverage their expertise in offering inventory management solutions.
Other key objectives of the Canadian chemical industry client were:
- To assess the risk of interruption from Tier 1 and Tier 2 suppliers
- To identify alternative suppliers for meeting demand-supply requirements
- To reduce exposure to potential cost increases
- To find a reliable demand signal to determine the necessary supply
- To test different capacity and production scenarios to understand their financial and operational implications
- To project the financial and operational implications of a prolonged shutdown
- To better match production and supply-chain planning with the expected demand
- To maintain a nimble approach to logistics management
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Our Integrated Approach
Infiniti’s inventory management solution involved a five-phased approach.
In the initial phase, the experts worked closely with the client’s operations and production teams to review bills of materials (BoM) and catalogue components. This phase also involved identifying components sourced from high-risk areas, determining the origin of supply, and evaluating supply chain complexities.
The next phase involved estimating the inventory along the value chain. This also involved identifying finished goods held in warehouses and raw materials with quality issues. Besides, this phase involved identifying the Canadian chemical industry client’s key suppliers and understanding their ability to meet supply requirements.
The third phase of the inventory management solution involved leveraging advanced statistical forecasting to obtain a realistic insight into base demand and developing a demand-forecast strategy. This phase also involved gaining visibility into the Canadian chemical industry client’s Tier 2 suppliers as they would impact the order fulfilment process of Tier 1 suppliers.
The fourth phase of the inventory management solution involved identifying alternative suppliers in non-impacted regions of the world and activating secondary supplier relationships to secure additional critical inventory.
The last phase of the inventory management solution involved refining the Canadian chemical industry client’s inventory strategy to mitigate the risks of supply shortages while balancing cash flows and perishability.
Business Outcome
With Infiniti’s inventory management solution, the client was able to identify the company’s key direct suppliers and understand their ability to meet supply requirements and potential risks. Also, the client was able to enhance workforce planning and focus on Tier 1 suppliers. Besides, the Canadian chemical industry client was able to work with Tier 1 suppliers on alternative plans and proactively alter supply chain plans to keep manufacturing running at maximum efficiency. As recommended by the experts at Infiniti Research, the client embraced new digital approaches to illuminate the supplier network and gain visibility to critical component supply.
The client was also able to understand and activate alternate sources of supply. Also, the Canadian chemical industry client was able to update inventory policy and planning parameters. Besides, they were able to refine their inventory strategy to mitigate the risks of supply shortages while balancing cash flows and perishability.
The experts recommended the Canadian chemical industry client to develop modularized production units that can be mobilized across different sites to help manage supply shortages during times of such crisis. In addition to this, the client was able to obtain a realistic insight into base demand, ensure dynamic monitoring of forecasts to react quickly to inaccuracies, and optimize production and distribution capacity. With Infiniti’s inventory management solution, the client was also able to create transparency on the multitier supply chain, estimate the inventory along the supply chain, demand a demand-forecast strategy, and manage cash and net working capital.
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