Quaker Chemical finds the perfect balance between service & inventory

With an already impressive service level, the Brazilian plant turned to Slimstock to help them further advance their operations. Focused on reducing the quantity of stocked items without harming the punctuality of deliveries to their customers, Quaker took the decision to implement Slim4.

Quaker Chemical’s Brazilian plant already had a great success rate with over 97% of all deliveries being made on time. “Our great challenge was to reduce inventory levels by at least 10% without impacting the service level,” says Alexandre Jacome, Operations Manager at Quaker Chemical Brazil. Until 2015, the stock was managed through a system focused on general business processes, with no specific focus on inventory management.

The decision to implement Slim4, was motivated by Slimstock’s success story with Quaker Chemical in the Netherlands. After implementing the inventory management solution, the Dutch plant was able to reduce inventory levels while still improving the service level. Slim4 was also successfully adopted at branches across Spain and Italy. In Brazil, the implementation process started in October 2015 and by January 2016, the solution was already fully operational.

Higher service level with less inventory

“Our main goals were to reduce inventory, improve the management of none and slow moving items as well as improve purchasing planning of raw materials,” states Jacome. In just 1 year, Quaker Chemical Brazil has managed to reduce its inventory by 20% while still maintaining their exceptional service levels. “These results were attained through a combination of confidence in the system as well as a high degree of internal discipline,” the operations manager emphasises.

Protection agaist volatility in exchange rates

Given that Quaker purchases 80% of its raw materials in US dollars, the stock reduction has also helped the company mitigate the impact of volatility in the value of the dollar. This was particularly beneficial when the local currency reached an all-time high against the dollar, jumping from R$ 3.10 to R$4.16.

Alexandre explains: “The surge in exchange rate would have had a much greater impact on our inventory values if we had not made the reduction, because value is a consequence of quantity.”

More reliable forecast

For Alexandre Jacome, one of the strengths of Slim4 is the reliability of basing forecasts for product sales and purchasing materials on the company’s historical data. “The forecasting capabilities of the system are much more reliable than the ERP we used previously.” Another benefit of working with Slimstock is company’s global culture: “With a local branch in Brazil, we can talk with Slimstock whenever we need to. There are no borders at Slimstock”.

With Slim4, Quaker Chemical Brazil plan to continue to improve their service level as well as gain greater control over non and slow moving items.