Performance Improvement in the Private Sector
PwC partnered with Arco Ltd, the UK’s only integrated provider of safety services and products, to overhaul its outdated inventory management systems by implementing SAP’s Supply Planning and Inventory modules, resulting in a 10% reduction in overall inventory, a 30% decrease in working capital, and improved service levels, ultimately positioning the company for sustainable future growth with an estimated return of £20 million from the initiative.
Arco Ltd is the UK’s only integrated provider of safety services and products. Building on 140 years of success, the company is proactively evolving its supply chain to stay ahead in an ever-changing global landscape. Legacy systems and manual processes struggled to respond to changing demand, so stock levels were inconsistent, with long lead times and poor supplier visibility. Excessive stock meant higher costs, while insufficient stock meant poor customer service and potential loss of sales, which could erode the company’s market position and jeopardise its long-term survival.
PwC was engaged primarily to reduce inventory costs and improve service levels, but also to support Arco’s future growth by systematising its planning process. The firm proposed a cutting-edge solution, built around the newly released Supply Planning and Inventory modules for SAP Integrating Business Planning (IBP), along with redesigned processes and AI/ML-powered automation, which would free up planning professionals to focus on value-add activity.
While PwC has a close relationship with SAP, and extensive experience of its products, the programme’s priority was to understand and meet the client’s strategic needs and deliver a durable, integration solution that would avoid future re-implementations. The firm therefore built a close and trusted relationship with Arco, which allowed for open communication and challenges to its existing processes, enabling the programme’s design phase to explore “the art of the possible” and consider alternative, best-practice approaches. As a result, the firm has transformed the client’s whole approach to inventory planning, rather than simply updating its technology.
Although the new SAP Supply Planning module offered the right overall functionality for the client’s needs, few of the firm’s clients had yet adopted it, so many specifics were still unknown and presented risks. It was especially important to balance early adoption with due diligence by recognising the unknowns and mitigating the risks. The firm therefore brought together a team of seasoned IBP specialists and involved SAP from an early stage, to help address emerging issues and avoid delays.
By adopting a bold and innovative approach, while also managing the risks, PwC has equipped its client with a transformed inventory process, supported by a system that provides real-time data integration and enables Arco to base its decisions on the latest sales orders, inventory levels and production status. The business can now respond more quickly to market fluctuations or unexpected demand shifts, while better data visibility across its departments enables them to collaborate more effectively and improve decision-making across the supply chain.
As a result, Arco has cut its overall inventory by 30% and reduced its working capital by 10%. It now has 100% availability across 18,000 products, and service levels have improved by 3%. With an estimated overall return of £20m from the programme, Arco’s new approach to inventory planning has given it the resilience needed for future growth.
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