CHALLENGE

A lower middle market, private equity owned, consumer products e-commerce company sought to optimize its inventory storage following a post-COVID sales decline. The goal was to free up cash on a monthly and quarterly basis, driving financial gains while positioning the company for future growth. To achieve this, they needed to focus on streamlining processes, eliminating redundancy, and releasing capital tied up in excess. inventory to scale efficiently. 

OUR ROLE

• EBITDA margin performance and value creation across a network of manufacturing and distribution facilities 
• 10%+ Inventory on Hand Reduction and implementation of lean inventory management practices 
• A greater inventory and working capital visibility and control to facilitate scalable growth for the business 

SOLUTIONS

• Developed historical and utilized market trends (EOQ Analysis) to understand total days on hand for all product lines and optimal inventory on hand at all locations 
• Conducted network-wide Value Stream Stream Analysis to identify critical areas for lead time reduction and network throughput 
• Conducted a distribution network optimization analysis to determine optimal warehouse locations based on E-Commerce profile
• Installed better performance KPIs and renegotiated better rates among 3PLS and suppliers 
• Installed pull model concepts to ensure changes did not affect customer lead times or satisfaction
• Identified $2M of inventory into addressable/non-addressable for disposition and negotiated with waste and reverse logistics providers to execute 

OUTCOME

• Improved YoY Gross Profit by $1 million by eliminating negative impacting inventory adjustments
•  Reduced Network Inventory on Hand 20% YoY
• Achieved a $4.3 million OpEx reduction in fixed costs through warehouse consolidation and 3PL contract negotiation