Pat Greeley, CFO
The project refocused the organization on the importance of inventory control and inventory processing. These improvements have been very sustainable as the business continues to grow while inventory turns continue to increase.
Reimann & Georger (RGC) is a manufacturer of marine products (boat lifts/docks), hydraulic construction tools and hoisting/ roofing equipment. The company, initially founded in 1898, has been under the same family ownership since 1972. RGC currently employs 57 people within its 70MSF facility. The company’s products are shipped both domestically and internationally.
The marine products (about 2/3 of annual sales volume) had been experiencing annual growth of 20% for several years. Unfortunately, profitability did not keep pace due to excessive inventory, carrying costs and the related impact on cash flow. In effect, inventories remained at the same level proportionally in terms of percentage of sales and only turned 1.8x annually.
RGC engaged Insyte Consulting to help resolve this situation. The current inventory (raw, WIP, finished goods) was analyzed in order to provide a better understanding of where the inventory dollars were tied up. Categories, such as high-dollar incoming components, were then assessed to determine if the current purchasing practices and min/max quantities needed revisions. Historical shipments, by SKU, were reviewed and analyzed for the top-moving marine SKUs. A current state value stream map, which included inventory, cycle time, change over, batch sizes, etc., was developed to identify where to improve the manufacturing system, smooth the flow and reduce WIP. The creation of a future state map specifically identified improvement points and prioritized those improvements based on related benefits. RGC then implemented Insyte’s recommendations resulting in significant performance improvements.
$1.2 million in annual sales growth for marine products.
$600,000 in retained sales among current accounts.
$250,000 annual cost savings for inventory related expenses.
Foundation for continuous improvement, (e.g. KanBan), for marine products.
Methodology to expand practices into two other major product lines.