Eureka Case 25 min Operations

Overstocked and Out of Stock

You are Sanne Vermeulen, Head of Central Planning at Noordveld Components, a €148 million distributor of industrial drive components based in Tilburg. Your largest customer has just told the board that a third quarter below contract means it buys elsewhere, and finance says you hold too much stock. You have six weeks.

The situation

Monday, 9 March 2026. In the boardroom, the maintenance director of your largest account reads two figures off one sheet. The first: 91.4% of order lines were filled from stock within 24 hours, against the 97% in his framework contract. The second: two consecutive quarters below it. Three accounts make up 38% of revenue; their contracts are written on fill rate, not price, and carry a penalty that fires below 95%.

The finance director's numbers arrive after lunch and point the other way. Inventory stands at €31.0 million, up from about €27 million, and turns have fallen from 4.1 to 3.6 a year. An internal scan puts €5.8 million of it in regional stock that does not move. Your mandate: one planning cycle, six weeks, to bring service back above the contract without adding a euro of working capital; inventory may not end above €31.0 million. Otherwise the board hands planning to a third-party logistics provider, and the nine roles in your team with it.

The network has two levels. Tilburg holds the full catalogue, 6,200 stock-keeping units, replenished by suppliers on a three-week lead time. Four regional points (Rotterdam, Eindhoven, Antwerp and Düsseldorf) hold the faster lines, are restocked from Tilburg with a day in transit and quote the 24-hour promise; each regional analyst sets his or her own safety stock. Katrin Weber, in Düsseldorf, points out that a line held in Tilburg cannot be on a customer's machine next morning. Pieter Nooteboom, who runs the Tilburg warehouse, points out that the same slow line sits in four buildings at once.

On your desk: twelve months of demand for a representative basket of 40 lines, fast, medium and slow movers, each with its safety stock, reorder point, lead time and measured fill rate.

Your job in this case: look at where the service gap and the stock sit, test what a safety buffer costs, and decide how you will read the basket: the first commitment of the six weeks.

The decision

How do you read the 40-line basket before you set a single buffer?

  • A · Rank lines by the euros they move a year
  • B · Rank by euros moved and by demand swings
  • C · Rank by gross margin, the best lines first

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