Date Added: May 2010
One of the leading automobile companies was looking to improve the management of its inventory of high-end, complex product offerings along with making significant cost savings. Recognizing the need for identifying profitable opportunities and bettering high inventory levels and slow-moving products, this automobile company sought assistance from Deloitte to get the job done. Deloitte worked on identifying potential cost savings worth several million dollars, and finding ways to reduce the orderable configurations in the product inventory by 66 percent. The study states that reasons as to why the company was finding it difficult to efficiently manage its product inventory and to develop a market driven product portfolio was lack of integrated financial data, inadequate competitor and market knowledge, divisions operating in silos, very little understanding of customers needs and absence of any awareness regarding the popular products and the products which did not sold well (in terms of sale velocity). This study further discusses the steps taken by the company with the help of Deloitte for quantifying the costs and benefits of their complex product line-up based on a market/customer-oriented view and in deriving an orderable configuration strategy, which would help in increasing sales and marketing profit on an ongoing basis for its vehicles in the United States.