Safety Stock Re-evaluation

Context

As Atlas Honda scaled up, recurring shortages and unbalanced inventory began to affect flow. Some components were heavily overstocked, including bulky parts that had once been bottlenecks and Karachi-sourced parts taking up warehouse space, while others had minimal buffers.

Approach

I reviewed inventory policy across more than 3,000 components and set cover by category. Illustrative policies:

1. Local / Karachi-sourcedAbout 3 days of cover for selected materials.
2. Just-in-time suppliersAbout 1 day for selected JIT suppliers.
3. In-house componentsAbout 1.5 days for selected in-house parts.
4. Hardware & long-leadAbout 20 days for specific hardware categories.

Each material was then checked against vendor reliability, JIT feasibility, outside processing and historical supply risk, and exceptions were kept where operational risk justified different cover. Revised levels were compared with the old ones and costed.

Outcome

The analysis identified around PKR 50 million of inventory that could potentially be released through the revised policies, while keeping risk-based buffers where they mattered. This was a policy improvement, not a blanket stock cut.