Stryker's 4-Step Inventory Reduction Process

March 7, 2007
Medical device manufacturer Stryker goes real-time with its key suppliers.

Stryker Instruments, a manufacturer of surgical instruments, had a classic inventory problem: it wasn't able to share real-time information with its key suppliers. While its inventory levels were too high, the company was hesitant to lower them for fear of stock-outs.

Using an inventory management solution from TradeBeam Inc., Stryker instituted a new four-step process with its suppliers:

  1. Stryker sets monthly minimum/ maximum targets for each part number. Suppliers are responsible for keeping inventory within the target inventory range.
  2. The inventory management system gives suppliers real-time visibility into Stryker's on-hand inventory levels, forecasts, current and future production schedules, and order commitments. More than 90% of Stryker's direct material supply is now managed through the min/max replenishment process.
  3. Using this data, the system helps suppliers determine how and when to ship to Stryker to ensure that inventory remains within the minimum/maximum levels.
  4. Suppliers enter into the TradeBeam solution promises for future ship dates with projected quantities, and they also provide advance shipment notice (ASN) information for products shipped.

As a result, Stryker has seen a 30% reduction in direct material inventory for its manufacturing facilities in Michigan and Ireland, as well as a 30% to 40% reduction in finished goods inventory sent to Stryker distribution centers in the UK and Japan.

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About the Author

Dave Blanchard | Senior Director of Content

Focus: Supply Chain

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During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

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