Turning A $3-million Write Off Into Cash...

CLIENT: Packaged Goods Company.


To streamline manufacturing, common stock keeping units (SKUs) were being introduced in North American markets. Supply lines involved six production plants, 14 warehouses, 200 distributors and 40,000 end-users. Consolidating 500 SKUs into 200 would make redundant old inventory valued at $5-million. The pressure to make a smooth and complete supply chain management transition was so great that the corporation set aside a $3-million provision to cover a write-off for the disposal of obsolete product.


By tightening the supply chain, net annual savings to the corporation would be enormous – and on-going, year after year.


Atticus created, implemented and managed a plan that provided six key deliverables.
•The client invested in a temporary facility to stage and store new product, allowing for rigorous planning and scheduling of customer conversion.
•The transition at each customer site was managed by a master schedule for each sales territory.
•Atticus aligned customer-specific sales forecasts to the production and distribution demand planning system.
•Next, Atticus created a “one-way” order processing program so that, once converted, customers would not revert to old-line product.
•Finally, Atticus trained employees: The sales force, manufacturing, inside sales office, warehouse and delivery plus the staff of distributors.


The plan saw the product line conversion on time, under budget, with no loss of customer or sales volume.
•Inventory utilization rose to almost 100%, meaning the $3-million write-off provision was not needed and returned to the treasury.
•Manufacturing efficiencies saw gross margin increase by $2-million annually.