Discover how one major company turned their production challenges into an impressive success story using Arkieva’s supply chain planning tools.
By rethinking their approach and optimizing their existing resources, they achieved astounding improvements in throughput, on-time shipments and overall efficiency—all without the need for new assets.
Company Overview: A business unit of a major chemical company faced a significant problem: while sales were growing by 10% annually, the production capacity was struggling to keep up with demand.
Industry: Chemical
Challenges: Operating internationally, the company had multiple plants, each operating independently in terms of capacity planning. As a result, it wasn’t feasible to utilize slack capacity at one plant to relieve an overload at another. Demand was allocated sequentially to the lowest-cost plant that could manufacture the product, causing low-cost and flexible plants to be overloaded while other plants were underutilized.
Solutions: Before assessing how to increase capacity, the company decided first to optimize the use of its existing capacity with Arkieva’s supply chain planning tools. Making the data accessible significantly increased planning effectiveness, as planners could now see the impacts of changes on other orders.
Quantifying and publishing the transition costs had an unexpected outcome: once the sales team understood the impact, they began exercising self-restraint when requesting schedule changes, reducing the number of change requests by over 30%.
Building on this success, the business developed a quantitative model to balance supply and demand across all plants.
Results After 12 Months:Â
- Throughput volume increased by 20%, far exceeding the norm of a 3-5% increase.
- On-time shipments soared from 80% to over 95%.
- The cash flow cycle time was reduced by 9%.
- Raw material inventories decreased by 2%, despite the increased throughput.
- Shipping costs remained flat, primarily due to reduced expediting.
