The amount of flexibility required coupled with the difficulty in maximizing the run size efficiency made managing this problem simply with more inventories expensive and problematic. It was determined that the first point in time when actual demand was known was when the customer’s order fulfillment system recognized their customer’s PO. This was a full one to two weeks before they expressed the demand to Engineered Profiles for replenishment which was based on when the parts actually shipped to their customer. Monitoring this on a daily basis is nearly impossible and relies on constant communication and often decisions are made based on out-of-date information.
Engineered Profiles determined that if we had access to the customer’s ERP system directly and could see PO Activity real time, an algorithm could be developed to constantly massage and optimize replenishment order mix. In addition this would occur much sooner in the fulfillment cycle and allow for far more flexibility for last minute changes or adjustments to the extrusion run sequence.