Robbleloth's group at Seagate is responsible for taking core disk drives and transforming them into retail kits. In moving product from factories to the customer, the company relied on new fulfillment and supply strategies to sharply reduce inventory.
It began with the supply side. Seagate identified a three-week process - one week to move drives from factories to joint design manufacturers (JDMs), one to build product into finished goods and retail kits, and one to move the finished goods into locations for shipment. In scrutinizing the process, however, it was surprised to discover that inventory was actually moving for just three days of that cycle, and sitting around for the remaining 18. So it began targeting product at rest, transitioning from a three-week planning process to daily supply execution. In the end, it shrank the process down to just three days - one for movements from the factory to JDMs, one for finished-goods transformation and the third for moving to a shippable location.
The project wasn't triggered by a significant increase in inventory. "We just wanted to get a focus on our retail supply chain," says Robbleloth, "and get a cross-functional team together."
In the process, Seagate discovered "a lot of skeletons in our closet" - problems that were interfering with the momentum of inventory. Dealing with those issues involved a great deal of change management. Robbleloth says it was vital to show that inventory reductions could have a dramatic impact on the company's balance sheet. "The more millions in savings you [identify], the more people are willing to change," he says. Seagate ended up reducing inventory by 50 percent in the first stage of the initiative.
Among the lessons learned along the way was to "jump in faster," Robbleloth says. The nine months spent on cross-functional design could have been compressed to between three and six months. "Jump in and work on the process later," he advises. "It's never complete."
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Keywords: supply chain, supply chain management, high-tech supply chain, inventory management, inventory control, global logistics, logistics management, supply chain planning, retail supply chain
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