September 21 2017 - 7:41 am

CASE STUDIES

International Project Management: Transfer of stock offshore
Following a decision to close its UK production facility and outsource all manufacturing to China there was an interim requirement to manage the transfer of £1.7M stock of components and finished goods from the UK to CEM in China. Until the stock was receipted into the facility in Suzhou onto the BAAN system the CEM would have no system visibility of components and was likely to reorder from the open market delaying the release of cash tied up in Ex UK stock holding and no record of unallocated stock existed. The remit was to release £1M cash from stock by end of QTR 3.

An unallocated stock model was built on Excel to capture the stock on the containers , the declared consignment stock of finished goods held at Suzhou plus any agreed buffer stock orders placed on a 12 week delivery . On arrival of the containers in Shanghai it became evident that the physical shipped quantities did not match the manifests and a number of obsolete parts had also been shipped. This created a major problem for the CEM and Chinese Customs as they could only import from WGQ the duty free port those items which were recorded on the manifest and those where demand was identified ie no obsolescence.

Discrepancies on over 550 lines were identified. A solution was put in place were all disputed items were moved to Hong Kong and a third container manifest generated to allow re-import into China with any obsolete stock removed and disposed of in Hong Kong.

A project to phase in the delivery of components and finished goods into the CEM warehouse was drawn up and implemented. By the end of August £1.2M of container stock had been utilised to fulfil orders and production demand.
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