Tier 1 Global Automotive Manufacturer: $13.8M Inventory Recovery
The Challenge
A Tier 1 global automotive plastics manufacturer operating 7 injection molding cells and managing $27.5M+ in direct purchasing spend had a severe inventory problem. Service component inventory sat at 163 days on hand because the facility served as a global aftermarket distribution hub where inventory had accumulated unchecked.
Rogue purchasing, input errors that bloated ERP quantities, and no cycle counting meant nobody truly knew what was in the building. Meanwhile, a major new product launch for two premium European and Japanese automotive OEMs required qualifying overseas contract injection molding suppliers under stringent quality requirements.
Our Approach
A facility-wide Kanban system improved information flow and reduced perpetual inventory overages. Service inventory was audited for dead stock, duplicate purchases, and incorrect ERP quantities, and cycle counting was established for the first time.
Contract injection molding suppliers were identified, audited, and qualified under compressed timelines to protect the launch dates.
The logistics area was reconfigured with new dock doors, RFID scanning, a staging area, and a redesigned returnable-dunnage layout, supported by standard work and lean material flow across the facility.
Measurable Results
- Finished goods reduced from 5 to 3 Days on Hand, component inventory from 9 to 5 DOH — saving $713,615 annually
- Service component inventory reduced from 163 to 100 DOH — recovering $13.1M (61% reduction)
- 100% on-time delivery sustained for production and service throughout the engagement
- New product launch sourcing completed on time for two premium automotive OEM programs
- Logistics area reconfigured with RFID scanning, new dock doors, and optimized dunnage flow
- Facility-wide Kanban scheduling operational across all 7 injection molding cells
“The service inventory had been invisible for years — nobody questioned why we had 163 days of stock sitting in a warehouse. Once we started cycle counting and implementing Kanban, the waste became obvious. We recovered over $13 million in the first year.”
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