Chemical Producer Reduces Finished Goods Inventory with Optimization Solution

Unit of Germany's TFL sees inventory drop 22 percent, service levels improve with ToolsGroup software

Unit of Germany's TFL sees inventory drop 22 percent, service levels improve with ToolsGroup software

Boston — October 21, 2005 — Chemicals manufacturer TFL has reduced its finished goods inventory by 22 percent while simultaneously increasing customer service using an inventory optimization solution from ToolsGroup.

The German leather chemicals group TFL spans 90 countries, with 15 branches and eight production plants throughout Europe, Asia and the Americas. The group has annual sales revenue of $320 million.

A subsidiary of the group, TFL Italia, selected ToolsGroup's DPM solution for an aggressive finished goods inventory planning and optimization project systematically addressing its entire production and distribution network. TFL aimed to reduce inventory holding costs while maintaining a high level of service.

"DPM has enabled us to lower inventory in a short space of time, without hurting our service levels," said Riccardo Jaforte, logistics manager for TFL. "In fact, it has actually improved our service levels and helped increase sales."

"Additionally, the integration with our transactional system, SAP R/3, was achieved as scheduled by ToolsGroup, with relatively minor involvement of our own resources," said Luigi Domenella, IT manager for TFL.

The DPM solution was initially installed in July 2003 and after just one month reduced inventory and increased service levels at TFL. Based on this success, TFL recently expanded the implementation with a second DPM implementation. Together, these projects produced an average global service level increase of 3.5 percentage points and increased average inventory turns from 90 days to 70 days.

Additional Articles of Interest

— For an in-depth look at how agribusiness Syngenta is reducing inventory while maintaining customer service levels by building a demand planning process based on a collaborative forecasting solution, see the article " Forecasting Processes from the Ground Up ."

— Do you only dream of having a supply chain as efficient as Dell's? Then it's time to wake up and manage your inventory liability. To find out how, read the article "Managing Inventory Liability in an Outsourced Relationship."

— Looking for a guide to content management systems to support product lifecycle information? Read the article "Managing Content Throughout the Product Lifecycle" for additional insights.

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