Stockouts are a big issue for any business. For any large company, it’s absolutely essential to have the packaging necessary to accommodate production. Let’s break down how Pipeline Packaging put together a custom inventory management program to eliminate stockouts and provide financial flexibility for the company’s manufacturing facility in Little Rock, Arkansas.
As a leading paints, coatings, and specialty materials, the company requires a regular supply of quality packaging. One of many manufacturing facilities across the globe, manufactures a variety of cutting-edge protective and marine coatings. The facility used to buy steel pails and paint cans direct, but any sudden increases in sales would lead to stockouts.
Another challenge with buying direct was that the company had to order pails and cans in large quantities to accommodate production. Massive packaging orders put a strain on cashflow, so the company welcomed some added inventory flexibility. Fortunately, Pipeline delivered a new packaging solution to address both availability and cashflow.
The first step of solving the company’s inventory woes was to provide a convenient stocking solution around their needs. This process involved setting up a distribution plan to ensure that the location always have enough packaging to stay ahead of schedule. For this location, that meant bringing their safety stock closer to home.
The importance of having extra inventory nearby is why Pipeline maintains a warehouse near the location that’s dedicated for the company’s packaging needs. The proximity of this warehouse not only cuts down on shipping costs, but also shaves down turnaround times. As the company needs inventory, Pipeline can rotate stock in to ensure that they always have the packaging they need to account for surges in production.
That flexibility also drastically frees up the company’s cashflow when they need more packaging. Instead of ordering multiple truckloads of packaging every time inventory runs out, the company can request smaller quantities to refill that safety stock. That’s a massive difference for a company that goes through as many steel pails and paint cans as this location does.
Thanks to Pipeline’s dedicated warehouse and inventory planning capabilities, the company now has the means to accommodate production increases. Pipeline’s supply chain specialists ensure that global paint and coatings manufacturer has enough stock to avoid costly stockouts. Meanwhile, our team grants them financial flexibility through smaller orders to keep them ahead of schedule.
The new inventory arrangement also proved valuable when the COVID-19 pandemic affected the packaging industry. The resulting shortages resulted in lead times of around 40 weeks for some packaging products. By having extra inventory at a nearby warehouse, the company had the luxury of guaranteed stock while other organizations struggled to source new containers. That extra time and inventory security proved essential for maintaining production.
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