GAINS Manages Australia's Largest Inventory Environment
GAINS was first implemented in the Royal Australian Air Force (RAAF) and then was expanded to the entire Australian Defence Logistics Command. Hit by budget cuts and the need to modernise, the RAAF initiated a project to identify ways to improve service levels, reduce inventory costs and balance assets across their global distribution network. After an exhaustive worldwide software selection process GAINS was selected as the preferred solution.
As a result of the RAAF implementing the GAINS, their first year of operations resulted in:
The successful results that the RAAF achieved from the GAINS, triggered the interest of the Australian Defence Logistics Command (ADL) to do the same with its other military branches.
“ADL knew we had to do something different because we had aircraft grounded for lack of the right parts,” stated the Australian Defence Logistics Command (ADL) program director, “yet our government was telling us we had to reduce inventory. Even with the strong documentable performance of the GAINS at the RAAF, the ADL felt a legal responsibility to review the current state of other technologies before awarding a defence wide contract. We sent out detailed selection criteria and asked all of the major software vendors in the industry to bid on it.”
“What was clear was that the GAINS’ solution was still light years ahead of the competition. We awarded the contract to GAINSystems because they came closest to meeting all of our requirements and demonstrated the willingness to enhance their product to give us the extra bells and whistles that we needed,” stated the ADL Program Director.
The unique optimisation and supply chain planning capabilities contained in GAINS that enabled the Australian Defence Department to achieve such results:
As a result of the RAAF implementing the GAINS, their first year of operations resulted in:
- $186 million reduction in inventory (down from $675 million to $489 million)
- 42% reduction of warehouse items held
- 15% increase in service levels
- 67% reduction in under stocked items
- 37% reduction in overstocked items
- 47% increase in balanced items
- 70% reduction in inventory management workload
The successful results that the RAAF achieved from the GAINS, triggered the interest of the Australian Defence Logistics Command (ADL) to do the same with its other military branches.
“ADL knew we had to do something different because we had aircraft grounded for lack of the right parts,” stated the Australian Defence Logistics Command (ADL) program director, “yet our government was telling us we had to reduce inventory. Even with the strong documentable performance of the GAINS at the RAAF, the ADL felt a legal responsibility to review the current state of other technologies before awarding a defence wide contract. We sent out detailed selection criteria and asked all of the major software vendors in the industry to bid on it.”
“What was clear was that the GAINS’ solution was still light years ahead of the competition. We awarded the contract to GAINSystems because they came closest to meeting all of our requirements and demonstrated the willingness to enhance their product to give us the extra bells and whistles that we needed,” stated the ADL Program Director.
The unique optimisation and supply chain planning capabilities contained in GAINS that enabled the Australian Defence Department to achieve such results:
- Dynamic Forecast Model Selection and Modelling Hybridisation that tests each of dozens of models for plausibility and accuracy to provide an objective demand plan baseline and eliminate as much human bias as possible. The process will select from or blend different modelling approaches including history-based, fleet-level mean-time between-failure, and probabilistic repair-bills-of-material.
- Dynamic Analysis of Supply and Demand Plan Variance for every SKUL (SKU/Part by Location) across the enterprise that considers all error sources including the variability in supply and user variance from plan. Only through this comprehensive approach can precise Service Level attainment be achieved (most alternative approaches overshoot for most items and undershoot for some leading to excess costs).
- Cost-Optimised Inventory Policies including Replenishment Order Sizing (non-repair) and Safety/’Service’ Stock calculated by SKUL, considering total annual cost, comprehensive error, targeted service levels, and all relevant dependencies and constraints.
- Leading Indicator, Extrinsic Variable, and Viability Analysis to ensure forecasts and plans are not just a “look in the rear view mirror.” These can include fuel costs (commercial), operations tempo changes (fleet service / ‘power-by-hour contracts), &/or fleet size (both).
- Multi-Echelon/Multi-Indenture provides the ability to optimise where & at what Service Level to stock in a repair bill-of-material as well as across a multi-level, multi-node distribution network. Considers comprehensive costs, critical paths, service level targets/agreements, and, where applicable, turn-around delivery times (TATs).
- Automated and optimised replenishment planning that determines the least-cost source for each replenishment (standard source, surplus location, alternate vendor, substitute part, new-versus-used given scrap rates, etc.); risk assessment determining the short/exception list of replenishments meriting planning review (& automatically launching others).
- Performance Based Logistics (PBL) management to optimise costs of fulfilling contracts with Service Level Agreements at optimal costs (including performance penalty and turn-around-time parameters). A simulation tool to model costs (and therefore pricing) of prospective PBL contracts at varying SLAs (while minimising input data required).
“We saved $14 million in six months. We are often promised these kinds of numbers; we’re just not used to having them delivered, GAINS, beyond a doubt, delivered.” – Wing Commander, Royal Australian Air Force