Stocking Up for Success
Intertraff's Strategy to Reduce Lead Times
Case Study: How Investing in Product Stock Helps INTERTRAFF Meet Customer DemandIntertraff is a company that produces and distributes high-quality traffic safety products. One of the challenges Intertraff faces is meeting customer demand while also keeping lead times as short as possible. To address this challenge, Intertraff decided to invest in holding stock of its products rather than relying solely on the "just in time" production method. In this case study, we will explore how this decision has benefited both Intertraff and its customers. The Challenge As a manufacturer of traffic safety products, Intertraff faces the challenge of meeting customer demand while maintaining a short lead time. Customers often require products quickly to address safety concerns, and delays in product delivery can have serious consequences. At the same time, maintaining low inventory levels is essential for cost control and efficient operations. To meet these challenges, many companies have adopted the "just in time" production method. This method involves producing goods only when they are needed, rather than producing a large stockpile of inventory in advance. While this method can help companies avoid excess inventory and associated costs, it can also create risks for companies and their customers. For example, unexpected delays in production or transportation can quickly cause shortages and delays in product delivery. The Solution To address the challenge of meeting customer demand while maintaining short lead times, Intertraff decided to invest in holding stock of its products. This allowed the company to reduce lead times and ensure that products were available when customers needed them. By holding stock, Intertraff was able to quickly respond to customer orders and reduce the risk of stockouts or delays. In addition, investing in stock allowed the company to take advantage of economies of scale in production and reduce production costs. While the initial investment in stock required capital outlay, the long-term benefits of reduced lead times and improved customer satisfaction more than offset these costs. The Result Investing in stock has had several benefits for Intertraff and its customers. First and foremost, customers have benefited from reduced lead times and more reliable product delivery. This has improved customer satisfaction and helped to build strong relationships with Intertraff's clients. In addition, investing in stock has allowed Intertraff to take advantage of economies of scale and reduce production costs. By producing in larger batches, the company has been able to reduce per-unit costs and improve profitability. This has allowed Intertraff to invest in new products and technologies, further enhancing its ability to meet customer needs. Overall, investing in stock has been a wise decision for Intertraff. By prioritizing the needs of its customers and investing in the infrastructure to meet those needs, the company has been able to build a strong reputation for quality and reliability. In today's competitive marketplace, this is a critical advantage that sets Intertraff apart from its competitors.