Case Study: Premium Automobile Manufacturer optimizes core inventory and cuts storage costs with Mu Sigma

How Our Inventory Optimization Strategy Led to $1mn in Annual Savings

Mu Sigma worked with Premium Automobile Manufacturer, a premium U.S. auto manufacturer, to improve inventory management for core parts. The customer needed to optimize existing storage, maximize returns on core inventory, and build a demand-driven inventory framework to avoid adding another storage unit.

Mu Sigma used its muUniverse and muPDNA frameworks, along with BOM data and core engineering input, to map part demand to core demand and forecast inventory using regression, time-series methods, and ARIMAX modeling. The solution enabled the customer to avoid an additional warehouse lease, terminate an existing storage facility lease, and dispose of 17.6K excess cores, generating $5.6M in cash inflow and saving up to $1M per year in storage-related costs.