Industry
Supply Chain Management

Hager Group

More efficient inventories start with better targets

Strategic challenge

Founded in 1955, Hager Group is a leading supplier of solutions and services for electrical installations in residential, commercial and industrial buildings. Ranging from energy distribution through cable management and wiring accessories to building automation and security systems, its products are sold in 129 countries with a turnover of €1.9 billion in 2015.

Excellent product availability on a large product portfolio is a key success factor for Hager Group. The company now wants to improve product availability with continuous improvement while also focusing efforts on inventory reduction. Therefore, Hager Group was looking for methodologies and tools to this effect.

Approach

Portfolio segmentation and targets setting

Creation of clusters with similar demand behavior and rule definition for replenishment strategy, service level and lot size.
Evaluation of supply and demand uncertainties, efficiency of current lot sizing rules.
Calculation of optimised inventory targets.

Process analysis and improvement recommendations

Maturity assessment of the main processes impacting inventory efficiency (Forecast, S&OP, DRP, MRP, Purchasing & replenishment).
KPI specification to measure inventory quality.

Supply Chain team training

Based on the model created in Step 1: training of Supply Chain planning team in principles and methods of inventory optimisation.
Development of specifications to define and utilise safety stock and anticipation stock targets in SAP.

Pilot on a limited number of SKU’s

Test phase of the model (large enough to be significant but limited also in term of risk) to check impact of new methods and correct understanding of the teams.

Extension to entire portfolio

Extension of methods on larger product scope. Implementation of targets and calculation in SAP to allow stable deployment and secured utilisation.

Result

Results obtained on 15% of total portfolio

  • OTD stabilisation and improvement of finished product DIO by 8%

Extension to total product portfolio

  • In progress…

Good teamwork with Mobius enabled us to increase drastically our knowledge on statistics and inventory optimisation. The finality: a customised method and basis for a tool we understand, can deploy and continue to improve ourselves.

Bruno Regnier, Materials Management Development Director
Hager Group

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