Over the years, demand planning and inventory optimisation have always been a hot topic for discussion. For many of these businesses, excess stock is both a major speed bump and something which causes headaches for management, finance and supply chain teams alike.
While there are a few specific segments of the automotive aftermarket where excess inventory is an unavoidable part of their business model, there are very few examples of businesses where no reduction in excess inventory could be achieved at all.
The influence of excess stock on business' performance
In the vast majority of organisations, regardless of the reasons that caused the excess stock, it is typically involuntary and unwanted. But what are the tell-tale signs that excess stock is putting the brakes on your business’ performance?
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Eng Soon Auto, one of Singapore’s most prominent auto-parts distributors, has selected Slimstock’s Slim4 software suite to reap the benefits of higher efficiency in the forecasting and purchasing process.
Eng Soon Auto Pte Ltd, founded in 1987, has successfully established and maintained its strong presence in the auto-parts market in Singapore. With more than 50 brands - including BMW, Mini and Mercedes - and over 100,000 items of spares, Eng Soon Auto distributes its range of products throughout Southeast Asia including Singapore.
After detailed data analysis with Slimstock’s team, Eng Soon Auto saw a lot of potential for getting insight into their inventory that Slim4 was easily able to provide. The analysis showed that items that were replicated across two warehouse locations could be minimized, as Slim4 could provide greater insight into potential redundancies.
Convinced of the value that Slim4 could provide, Eng Soon Auto has started implementing the software and expects to go live in Q2 2018.
One of the benefits Eng Soon Auto hopes to accrue is achieving the perfect balance between new, mature and end-of-life items in stock, and better refine the actions that need to be taken in every specific phase of the product life cycle. This will allow it to harmonize customer expectations with company resources. Additionally, it hopes to save on rush orders and last-minute freight charges.
“We had too many items in our inventory, and on occasion we missed out on re-ordering certain items, impacting the bottom line. Our purchasing methods could also be tightened and streamlined. Confidence in Slim4 solving our inventory issues was one of the main reasons we chose them,” said Ng Zu Sheng, Director, Eng Soon Auto.
“We are looking forward to an increase in sales and a minimum of 5% reduction in inventory value just in the first year,” he added.
Erik de Witte, Operations Director for Southeast Asia for Slimstock said: “Eng Soon Auto is a very important and reputed local automotive player, and we are genuinely pleased about the beginning of what we hope will be a long-lasting and fruitful relationship. We look forward to working closely with them to help them maintain and exceed their very high standards and service levels.”