Client Case Study

Improved customer service and inventory management

Challenge:

Baxter International – a global healthcare company with sales of $11.3 billion and more than 46,000 employees – had multiple, siloed forecasting and planning practices that led to thousands of customer backorders, significant inventory surpluses and huge increases in distribution costs. Management needed to engage employees to align all procurement, production, sales and distribution planning against a single demand forecast.

Actions:

• Partnered with Manufacturing, Sales, Procurement, Distribution, Finance, Marketing, Information Technology, Human Resources and Communications to develop a strategy for changing the culture and increasing individual accountability for inventory management.
• Created a compelling story for change and a communications infrastructure between corporate and the plants to support implementation.
• Developed a “people vision” for new roles and responsibilities in planning processes.
• Provided communications to engage employees in new inventory management processes.
• Coached executives on communication and supporting behavior required to launch the effort and win employee support.
• Helped involve employees in decisions.

Results:

• Saved $3 million and reduced inventory costs by 20 percent at the first implementation site.
• Realized annual savings of $5 million to $10 million.
• Employees identified a reporting error and helped avert thousands of customer backorders.
• Improved employee accountability for sharing information across functions to meet customer demand.
• Increased employee understanding of the new Supply Chain management initiative to 87 percent (prior to the launch of new system) – a 43 percent improvement over eight months.