Radix Analytics Pvt Ltd

Spares Inventory Optimization

Radix Analytics Pvt Ltd > Industrial & Energy > Inventory Optimization

Issues & Objectives

  • One of world’s largest mining corporation having a network of 9 mines
  • Approximately $ 400 million working capital used to manage spares inventory of about 182K SKUs
  • Stock position monitored by the MRP system every ½ hour & orders are placed
  • Objective was to propose improvement to spares inventory management at each storage location to minimize locked up working capital while meeting SLAs

Benefits

  • 20% savings in working capital ~ $ 80 million
  • The existing MRP database was updated with new ROP & EOQ

Project information

Techniques

Mathematical Optimization

Client

Largest Mining Corporation

Industries

Supply Chain & Retail

Location

Singapore

Challenges

  • Large number of SKUs ~182K
  • Demand variations

Solution

  • Derived inventory policy at the network level from ROP and EOQ
  • Identified 9 different models for distributions of demand volume
  • Developed an ML decision tree for choosing appropriate model based on value & velocity
  • Computed EOQ using selected model

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