This PPT slide, part of the 91-slide Services Growth & Effectiveness Strategy PowerPoint presentation, titled "Activity 2: Identify Opportunities to Improve Spares Inventory Management Performance" presents a structured approach to enhancing inventory management for spare parts. It outlines two main areas of focus: improving inventory turns and reducing field stocking locations.
The left section details the current inventory situation, highlighting total inventory valued at $310 million and parts cost of sales at $89 million. It emphasizes the importance of inventory turns, providing a benchmark comparison against industry standards for various sectors such as aircraft, machine tools, and large trucks. The figures indicate that the current inventory turn for the subject company is 0.65, significantly lower than the benchmarks of 2.9, 1.7, and 3.8 for the respective industries. This discrepancy suggests a substantial opportunity for improvement.
The slide also outlines a benefits calculation, assuming an increase in inventory turns to 1.8, which could lead to reduced carrying costs. The annual carrying costs associated with the current inventory are noted as $4.5 million, indicating a direct financial implication of inventory management practices.
On the right side, the slide addresses field stocking locations, detailing the current number of locations and associated costs. It lists key metrics such as service levels and the percentage of orders that require next-day delivery. The benefits calculation here focuses on improving service support processes, which could streamline operations and reduce unnecessary inventory.
The steps outlined at the bottom guide the reader to identify opportunities by comparing current practices to industry benchmarks, emphasizing the need for a systematic approach to inventory management. This slide effectively communicates the potential for operational efficiency and cost savings through targeted improvements.
This slide is part of the Services Growth & Effectiveness Strategy PowerPoint presentation.
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