A Global Automotive Player Reduced OPEX by Implementing AI-based Inventory Planning Models

Background and Challenge Story

A global automotive player faced a recurring issue of stock shortages in some of their plants. They also incurred an unnecessary decrease in costs from excess inventory in their other plants. They want a solution to efficiently managing their inventory to minimize stock levels in their plants without running out. This imbalance in inventory management affected the supplier's overall operational efficiency and had a negative impact on their bottom line.

Solution Story

Adastra developed an AI-based solution to enhance the client's inventory control system. This innovative system offers a unified view of all inventory, which allows for efficient, streamlined management of stock levels across various locations. This solution also empowers cost-effective purchasing decisions for our client.

By analyzing past data and identifying upcoming trends, the client can now predict future demand. That information will allow the client to make informed inventory decisions to avoid stock-outs and excess inventory.

Impact

The solution has increased operational efficiency at the plant level. This prevents runouts and enables effective parts-sharing. The client has also experienced significant cost savings. Strategic decision-making was also enhanced by data-driven insights. Overall, Adastra's inventory control solution led to an estimated value creation of at least US$5M per year. 

Furthermore, our solution improved the client's ability to negotiate better prices with suppliers, which reduced costs. The accurate forecasting and inventory management prevent overinvestment, ensuring financial stability and promoting a more sustainable and profitable business model.

• Lowered depreciation costs through efficient stock management, preventing over-investment.
• Accurate forecasting by keeping the stock at minimum without running out.
• Effective parts sharing through the inventory control system.