The companies current material management strategy did not satisfy the requirement of the business to effectively control the supply and consumption of material to production orders from the warehouse and the production line. The management solution did not adequately control and account for the company’s stock.

To understand how the company managed material, as review was carried out with all functional stakeholders and the information gathered was used to support the development of the new material management strategy.

The new material management strategy was based on ABC analysis, value and volume and ABC stratification.

The stock was segregated in terms of value and categorised into ABC with A items being the highest value and C items being lowest value items.

A – class items were classified as high value, kitted to production orders and the kits were delivered to the shop floor. The stock was cycle counted in the warehouse.

B – class items were classified as medium value, issued to the shop floor by a replenishment matrix and issued to the production order from the production line. The stock was cycle counted on the production line and in the warehouse.

C – class items were classified as low value, issued to the shop floor, categorised as floor stock on the Bill of Material and freely available for the production shop floor to take. C class items were costed to the Bill of Material and not cycle counted.

Controlling the stock by ABC stratification and closely monitoring the stock based on value and volume allowed the organisation to accurately control and account for the value of inventory.