Situation
A manufacturer of durable medical equipment lost productivity due to inventory supply issues. A manual audit process and an inefficient part deployment strategy made it hard to track part location, the number of parts and usage over time. As a result, the manufacturer experienced overstocked inventory and production shortages. The customer turned to Optimas to overhaul its inventory management system and eliminate downtime.

Solution
Optimas implemented a customized inventory management program with smart technology that provided clear visibility of consumption data, delivered operational efficiency and generated cost savings for the customer. By moving from a direct line feed to a supermarket approach, Optimas consolidated all inventory into one central area making parts easier to find while reducing duplicate parts held across multiple locations. Each part was set up with a two-bin Kanban system and stocked with one week’s worth of inventory. Optimas installed the OptiRack VMI Solution which uses advanced RFID technology for automatic inventory replenishment. Within one month, Optimas rapidly implemented and trained the manufacturer on the new smart system.

Results
With balanced on-hand inventory and instant access to part levels and consumption, the manufacturer no longer has excessive inventory or product shortages. A more efficient operation led to 60% fewer bin locations and reduced labor time and inventory costs.

• Lowered total cost of ownership by $70,000
• Reduced on-hand inventory by 30%
• Increased inventory turns by 87% (6 to 26)
• Decreased bin locations by 60% (1,065 to 428)