2009 West Coast Case Competition Acme Metals Aerospace Company Solution

1. 2009 West Coast Case CompetitionAcme Metals Aerospace Company Solution

2. Solution • Strategy • Set & communicate goals for entire company: • Flat – decided to focus majority of effort and resources on flat product inventory management • Goal: Reduce $10-15 million in inventory • Assigned key Executive to flat inventory goal • Extrusion – since the purchase order size is significant to maintaining the margin, which is a critical company goal and the inventory is highly specialized and reserved, it was decided to make this a 2nd priority to flat. • Goal – at a minimum, keep inventory levels flat (reduce if possible)

3. Solution • People • Each branch assigned an Inventory Manager and/or resource to be responsible for inventory levels and coordination • Larger branches – dedicated resources • Smaller branches – resources not fully dedicated but inventory was considered a key priority • Reviewed the skillsets required for the role vs. potential candidates – promoted from within to get the right people in the right roles • Developed a team – set common goal, invested in training, meetings etc.

4. Solution • Process (High Level) • Metrics – developed inventory metrics (by branch, by product line) and tracked daily = management focus • Pay – tied pay to performance/ metrics (inventory became one of the key components for bonus for ALL functions) • Focus – the Executives emphasized the importance of inventory and it became one of the key topics during branch meetings/ conversations • Communication/ Priorities - Held monthly meetings with all Inventory Managers, Branch Managers and key Executives to develop plans, track progress etc.

5. Solution • Process (Inventory Planning) • The Inventory Executive, Inventory Manager/ resource, Branch Manager and other key parties met to review specific contracts, inventory, etc – developed plans to address for each specific branch/ contract • Identified and cleaned up data integrity issues • Developed overstock lists and worked with Sales to sell off inventory • Developed process to check rems to make sure to utilize available inventory prior to placing a new PO • Completed a review of reserved inventory for obsolete items and completed a sell off and/or scrap program while metal prices were high. Kept the rest in stock.

6. Solution • Process (Inventory Planning) • Developed process to share inventory among branches and encourage transfers when best for total company bottom line (Inventory Managers met to review common items once a quarter at minimum in person and weekly by conference calls) • Provided inventory planning training • Worked with mills / customers to increase the use of material via spec combinations etc (can use same item to fill more customer orders)

7. Solution • Process (Inventory Planning) • Reviewed incoming PO’s for opportunities to push out or cancel if possible • Developed a rough S&OP (sales and operations planning) analysis and meeting process – evolved over time with improved people, process, and tools • Technology/ Tools • Leveraged the Excel tool (“poor man’s MRP”) • Updated based on Inventory Manager input • Provided training • Utilized for S&OP process • Developed Additional reports to manage inventory