Supply Chain Optimization for Efficient Inventory Management
Learn how Aimpoint Digital led the optimization of supply chains for a leading CPG and manufacturing company, achieving substantial cost savings and efficiency gains.
The Challenge
Our client is a leading global manufacturing company with billions of dollars in revenue. They operate a complex supply chain with thousands of SKUs across multiple plant locations and distribution centers, making optimal safety stock and transportation decisions a key component of their operations.
The client needed to streamline product flow and inventory management processes across their complex supply chain. They required a solution to determine sourcing decisions, shipment quantities, and safety stock levels to meet customer demand efficiently while minimizing costs.
Our Approach
Our team devised a comprehensive solution to address the client’s supply chain optimization challenges, including:
Mathematical Optimization Model
We formulated a mixed-integer programming (MIP) model to determine sourcing decisions, shipment quantities, and safety stock levels. The model considered product demand, production capacity, transportation constraints, and inventory requirements.
Gurobi Solver
The optimization model was solved using Gurobi: a powerful tool that efficiently solves complex decision-support problems.
Dataiku Webapp Integration
We developed a user-friendly interface using Dataiku to allow the client to interact seamlessly with the optimization model. The web application provided a visual interface for inputting data, solving the model, and analyzing results.
Results
The solution enabled the client to reduce safety stock levels by approximately 30%, resulting in lower inventory holding costs and improved working capital management.
Thanks to optimized product flow and inventory management processes, the client experienced improved operational efficiency and reduced lead times, enhancing overall supply chain performance.
Our client can now easily access easy to use solutions for valuable insights into their operations, fueling informed decision-making.
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Key Takeaways
By leveraging mathematical optimization techniques and advanced tools like Gurobi and Dataiku, Aimpoint Digital helped our client achieve significant ongoing cost savings, reduce their inventory levels, and streamline their supply chain for greater profitability and efficiency.
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