Published on 26 Apr 2012

Validated on 16 Dec 2013

"A better handle on surplus inventory means we can better anticipate the materials we need to make more products, and more efficiently produce those products to increase sales." - Andrea Milan

Customer:
Selco S.p.A

Industry:
Fabrication & Assembly

Deployment country:
Italy

Solution:
Business Performance Transformation, Smarter Commerce, Smarter Planet

Smarter Planet:
Smarter Manufacturing

IBM Business partner:
MBM Italia Management Systems

Overview

Founded in 1979, Selco Group S.p.A. manufactures arc welding systems and power sources for aluminum, steel and stainless steel. Located in Padova, Italy, the company has a second plant in Onara and employs more than 200 people in 10 locations.

Business need:
What do manufacturers today have to lose if they can’t track surplus materials in their inventory? Profits, for one thing. With an accurate picture of what’s left over at the end of the day, companies can accurately predict what other materials are needed to turn that surplus into finished products. Lack of information about inventory can also lead to lost sales. Selco was losing sales due to incomplete knowledge about inventory and inefficiencies that prevented it from meeting tight delivery deadlines. It needed a way to anticipate surplus materials to more efficiently run production.

Solution:
Selco used smart optimization software to find parts, assess their value, and figure out what other materials were needed to turn those parts into more products. The company gained insight into inventory usage and availability that enabled it to reduce leftover stock and also more predict how many materials and finished products it would need in the future. Without surplus stock and missing information, the manufacturing process is more efficient and Selco has been able to reduce the number of sales lost due to incorrect inventory information and inability to meet tight delivery deadlines.

Benefits:
Reduced inventory by 15 percent by eliminating surplus parts Reduced the number of lost sales opportunities by 70 percent with the ability to produce more products and deliver them in less time Improved efficiency of the production process with automation and more accurate information, and gained a more accurate picture of inventory usage and availability, enabling management to define more realistic company goals

Case Study

Founded in 1979, Selco Group S.p.A. manufactures arc welding systems and power sources for aluminum, steel and stainless steel. Located in Padova, Italy, the company has a second plant in Onara and employs more than 200 people in 10 locations.

The Opportunity
What do manufacturers today have to lose if they can’t track surplus materials in their inventory? Profits, for one thing. With an accurate picture of what’s left over at the end of the day, companies can more accurately predict what other materials are needed to turn that surplus into finished products. Lack of information about inventory can also lead to lost sales. Selco was losing a number of sales due to incomplete knowledge about inventory and inefficiencies that prevented it from meeting tight delivery deadlines. It needed a way to anticipate surplus materials to more efficiently run production.

What Makes It Smarter
Selco used smart optimization software to find those parts, assess their value, and figure out what other materials were needed to turn those parts into more products. The company gained insight into inventory usage and availability that enabled it to greatly reduce leftover stock and also more accurately predict how many materials and finished products it would need in the future. Without surplus stock and missing information, the manufacturing process is much more efficient and the company has been able to reduce the number of potential sales lost due to incorrect inventory information and inability to meet tight delivery deadlines. In this case, knowledge about parts makes the whole company stronger and more profitable.

Real Business Results
· Reduced inventory by 15 percent by eliminating surplus parts
· Reduced the number of lost sales opportunities by 70 percent with the ability to produce more products and deliver them in less time
· Improved efficiency of the production process with automation and more accurate information, and gained a more accurate picture of inventory usage and availability, enabling management to define more realistic company goals

Components

IBM products and services that were used in this case study.

Software:
IBM ILOG CPLEX Optimization Studio

Legal Information

© Copyright IBM Corporation 2012 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States April 2012 IBM, the IBM logo, ibm.com, CPLEX and ILOG are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.