<p>Demand has become increasingly difficult to forecast in today’s volatile markets. Being able to produce towards real demand is becoming vital for companies, since inventories of finished goods are expensive to maintain and because miscalculated products tie up capital that in the end is never repaid. More and more companies are using postponement strategies to delay the process of producing until real demand has become known. </p><p>Tooling Support Halmstad is a company within the manufacturing industry, which has become aware of the benefits with postponement strategies for parts of their production. In the year of 2006 Tooling Support Halmstad implemented a neutral stock for taps, their largest product. The target was to reduce their lead time and capital tied up.</p><p>The purpose of this report is to evaluate Tooling Support Halmstad’s achievements, regarding improvements of lead time and capital tied up, in effect of the implementation of a neutral stock. The neutral stock’s impact on Tooling Support Halmstad’s production and inventory strategy will be described in order to fully understand the most important factors when implementing a neutral stock. This study will not examine all factors arising from implementation of a neutral stock, since that would make it unreasonable extensive. The time periods examined in this report is the last quarter of 2005 and the first quarter of 2007. This has been done in order to compare the situation before the neutral stock with the situation after the implementation. This case study has used qualitative research methods. A small number of persons, from different parts of the organisation, have been interviewed in order to deeply evaluate this specific situation.</p><p>The result shows that the implementation of a neutral stock has been beneficial for Tooling Support Halmstad. Their lead time has decreased drastically and their level of service towards the central warehouse has improved as well. It exist strong indications of a decrease in capital tied up, even though any specific values have not been possible to provide.</p>

Demand has become increasingly difficult to forecast in today’s volatile markets. Being able to produce towards real demand is becoming vital for companies, since inventories of finished goods are expensive to maintain and because miscalculated products tie up capital that in the end is never repaid. More and more companies are using postponement strategies to delay the process of producing until real demand has become known. Tooling Support Halmstad is a company within the manufacturing industry, which has become aware of the benefits with postponement strategies for parts of their production. In the year of 2006 Tooling Support Halmstad implemented a neutral stock for taps, their largest product. The target was to reduce their lead time and capital tied up. The purpose of this report is to evaluate Tooling Support Halmstad’s achievements, regarding improvements of lead time and capital tied up, in effect of the implementation of a neutral stock. The neutral stock’s impact on Tooling Support Halmstad’s production and inventory strategy will be described in order to fully understand the most important factors when implementing a neutral stock. This study will not examine all factors arising from implementation of a neutral stock, since that would make it unreasonable extensive. The time periods examined in this report is the last quarter of 2005 and the first quarter of 2007. This has been done in order to compare the situation before the neutral stock with the situation after the implementation. This case study has used qualitative research methods. A small number of persons, from different parts of the organisation, have been interviewed in order to deeply evaluate this specific situation. The result shows that the implementation of a neutral stock has been beneficial for Tooling Support Halmstad. Their lead time has decreased drastically and their level of service towards the central warehouse has improved as well. It exist strong indications of a decrease in capital tied up, even though any specific values have not been possible to provide.