Genesis NGN developed an AI-based software solution to optimize the supply chain of an electric bike manufacturer that was experiencing problems such as long lead times, huge inventory, and traceability issues.
The Client
The client is an Electric Dirt Bike manufacturing company based in Dubai that exports bikes to many countries all around the world.
The Challenge
An Electric Dirt bike involves hundreds of parts, some of which (like batteries) come from different countries. The client works with multiple suppliers to get all the parts. But the challenge comes in the sheer coordination required to ensure that all parts from all suppliers are available at the time of manufacturing. Often, parts from some suppliers are available in abundance, while some are always in short supply. This leads to a constant situation of underutilized manufacturing capacity and a corresponding impact on sales. To mitigate the situation, the company tries to create a buffer of inventory, but that results in tied-up capital which could be better utilized elsewhere. The company tried different inventory management and SCM solutions, but none of them worked for the company due to its unique challenges, and ultimately the team kept relying on Excels to keep a track of everything.
Solution
In order to streamline the supply chain, consultants of Genesis started by examining the past data using Big Data to find the trends in the delivery timelines of different suppliers. Then, the same exercise was done to find the manufacturing trends to know which bikes, and subsequently which components, are required and in what quantities. Seasonality was also factored into project demand over a full year.
Based on that, an AI-based SCM system was developed, which would be hooked into manufacturing, sales, warehouse, as well as suppliers. Based on the manufacturing, projected sales, available inventory in warehouses, as well as the lead time and optimum order quantities of each supplier, the system was able to accurately project the ordering times for different components for each supplier, and then further track it to delivery. Additionally, this software recommends the best location for a warehouse to increase manufacturing and distribution efficiency.
Benefits
- Cost reductions in inventory
- Instances of idleness are reduced
- Reduction in buffer stock dependence
- Capital does not need to be tied up in inventory
- Increase in capacity utilization
- Increase in sales
- The finished products are sent to the distributor on time
- An increase in customer satisfaction
