Lessons in Inventory Management
Warehouse space crunch
Intralox is a family-owned provider of conveyor belting, conveyor equipment, and plant-optimization services. From its base in New Orleans, the company serves a wide range of customers from car washes to airports, up to and including such Fortune 500 companies as Amazon and FedEx. Committed to meeting all its customer needs immediately, Intralox intentionally carries a large inventory. However, as the company faced the prospect of running out of warehouse space, executives approached Leaders for Global Operations (LGO) for help with inventory management.
Setting inventory levels
Students interviewed multiple stakeholders within the company to gain a better understanding of the business and refine the project scope. They gathered data on demand/usage, production, inventory levels, and reorder points. Using this data, they developed an inventory level-setting methodology and a framework for implementation.
The model the students created enabled Intralox to conduct scenario planning and compare the costs of holding inventory to the costs of changing manufacturing setups to produce new inventory more frequently. This data analysis transformed entrenched thinking at the company, with the CEO becoming receptive to new ways of running his business. Ultimately, the work also helped Intralox re-evaluate its warehouse needs.
Intralox is now seeking to put another LGO team to work on a new project, which will be based on the first team’s recommendations. In reflecting on the students’ work afterward, one company leader noted, “We were very impressed. The insights they shared and deliverables they provided were very helpful for us as a company. They did an excellent job of understanding our culture and made recommendations that fit with the priorities of our company.”