Improved Inventory Accuracy
and SAP System Integration
Yielded Major Gains

Overview

A leading steel producer manufacturers over 17,800 metric tons of steel annually had significant issues with inventory control and asset visibility.

Challenges

A steel manufacturer faced significant issues with inventory control and asset visibility. Their system—SAP—was not being utilized effectively, resulting in major discrepancies between recorded inventory values and actual physical stock. These gaps impacted not only warehouse operations but also financial reporting and depreciation accuracy.

The SAP system had been implemented without a proper needs assessment or development of a requirements package. The organization “turned on” the system prematurely, bypassing critical planning and process design phases. As a result, the setup did not align with operational needs, contributing to systemic errors.

Solutions

• Facilitate a “Kaizen Event” to identify and eliminate warehouse inefficiencies.
• Conduct a full review of existing processes and define both current-state and future-state workflows.
• Create standardized warehouse locations in both the physical space and SAP.
• Define inventory attributes and project nodes to tie value directly to specific items.
• Set up correct min-max quantities and warehouse logic.
• Perform a complete physical inventory of the client’s 100,000-square-foot warehouse to establish a baseline for accuracy and value.

Results

• Improved client inventory accuracy from 40% to 98%.
• Created real time visibility of the client’s physical assets in SAP.
• Netted a $15 million dollar increase in the client’s inventory value.
• Client’s warehouse operations became 100% standardized.