How Smarter Inventory Strategy Cut Costs and Boosted Production Reliability

The client engaged RPM after inventory and warehouse challenges began driving higher costs and disrupting production. Despite carrying what leadership believed to be excessive inventory overall, the organization frequently experienced stockouts of critical components. At the same time, obsolete, expired, and slow-moving materials accumulated, tying up working capital and consuming valuable space.

Inventory data had become unreliable — significant gaps existed between system-recorded and physical inventory, inventory turns varied widely across SKUs, and "phantom inventory" was common (materials appeared available in the ERP but could not be located on the floor). Poor labeling, weak location control, and missing barcodes further reduced visibility. Warehouse operations relied heavily on a small number of experienced individuals who knew where parts were informally stored.

These issues directly impacted production: line stoppages became routine due to missing materials; schedules required constant rework; customer delivery dates were threatened; throughput slowed; and emergency purchases and premium freight became standard operating practice.