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Reducing costs and increasing efficiency
Inventory optimization at Jägermeister
As part of the inventory optimization at Jägermeister, an integrated inventory and production strategy was developed. The optimum production batch sizes were calculated and suitable safety and reorder levels were derived. This enabled stock levels to be reduced by 15 percent and external storage costs to be cut.
About the company
Jägermeister was founded in 1934 and is headquartered in Wolfenbüttel in Lower Saxony. The company specializes in the production of herbal liqueurs and sells a globally renowned product under the Jägermeister brand, which consists of 56 natural ingredients. The family-owned company values quality, authenticity and responsible consumption and is involved in social and ecological projects as part of its sustainability strategy. Mast Jägermeister SE employs over 1000 people and produces exclusively at its Wolfenbüttel site. The brand is represented in over 150 countries and is one of the world’s leading suppliers in the premium spirits segment.
The project
The challenge
Jägermeister was faced with high inventory and external storage costs caused by the growing business and the existing warehouse strategy. There was a lack of safety and reorder points, while at the same time a high level of availability was required. In addition, production and sales planning was at different planning levels (month/week).
Consulting approach
An integrated production and inventory strategy was developed, taking into account optimal production lot sizes as well as safety and reorder levels. The calculation was carried out at the SKU level and based on a defined service level. The procedure consisted of the following steps:
1. Evaluation of current strategies:
- Calculation of the dynamic, rolling range to analyze the current situation and derive measures
- Monetary assessment of relevant cost and influencing factors to determine the optimal production lot sizes
2. Development of the model:
- Consideration of practical implementation options for overseas shipments, e.g., direct shipments from China
- Development of the model for the integrated production and inventory strategy based on actual analysis, forecast accuracy, and optimized batch sizes
3. Ensuring target delivery capability:
- Inclusion of specific Jägermeister factors such as production lead times and desired service levels per SKU.
Solution and customer benefits
With the introduction of an integrated production and inventory strategy, Jägermeister sustainably reduced its total inventory by 15 percent. This led to a significant reduction in external storage costs and improved process efficiency along the supply chain.
Conclusion
The strategy had a direct impact on efficiency: lower storage costs, more stable processes, and consistent service levels now form the foundation for sustainable inventory management.
Your Contact
Dr. Bernhard Höveler
Partner & Managing Director
valantic Supply Chain & Procurement Consulting