Stryker Case Study
An Inventory Management Makeover
Company realizes 110% ROI by reducing inventory and improving supplier performance.
Business Challenges
Stryker Instruments, a leading provider of surgical instruments and pain management systems, suffered from inflated inventory levels caused, in part, by an inability to share real-time forecast and consumption rate data information with suppliers. As a result, Stryker faced frequent stock-outs and a variety of time-consuming supply chain administrative issues.
Selecting TradeBeam
Stryker wanted to give its U.S. and overseas suppliers a window into data stored in the company’s MRP system—without administering a costly EDI solution. In addition, project leaders wanted to reduce inventory through more efficient scheduling and replenishment processes. They also wanted a means of rating supplier performance.
Stryker selected TradeBeam i-Supply because it provides suppliers with real-time inventory consumption, forecast and shipping information, and would provide Stryker with complete visibility into the performance of each supplier. Stryker also recognized that the pay-as-you go, on-demand service would deliver a return on investment in less than a year and have a direct impact on net cash flow.
Inventory Reduction
TradeBeam i-Supply allowed Stryker to reduce inventory on selected parts by 16% in just 37 days, thanks to an aggressive but flexible implementation schedule. This alone translated into immediate carrying costs savings and an ROI in excess of 110% for the first year. i-Supply also eliminated premium freight shipments from suppliers and has helped Stryker save thousands of dollars each month by eliminating stock-outs.
Stryker suppliers have also benefited. Advance Turning and Manufacturing, Inc. was able to reduced its inventory levels and improve its production schedules for parts to Stryker. And Ultra Machine Company, Inc. was able to schedule all shipments to Stryker on one day each week, saving both time and costs while also improving customer service.
Key Business Benefits
- 30% reduction in direct material inventory for Kalamazoo and Ireland facilities
- 30–40% reduction in finished goods inventory sent to Stryker distribution centers in the UK and Japan
- Better control over the assembly process, including reduced excess and obsolete inventory
- Reduced expedited freight and stock-outs of direct materials
- Reduced supply chain headcount even as direct material purchases rose by 20%
