Improving Inventory Management at Lutron Electronics to Enhance Production Efficiency and Reduce Costs

Abstract

This project was carried out at Lutron Electronics, a company specializing in lighting control systems, where production efficiency was being affected by inventory inaccuracies, material shortages, and limited forecasting capabilities. The project addressed the problem of ineffective inventory management, which contributed to increased operational costs and delayed production schedules. The main objective was to optimize inventory practices to achieve 98% inventory accuracy, ensure material availability, and increase production output by 15–20% over six months. The methodology involved assessing current inventory processes, adjusting recorder point parameters, implementing automated stock alerts, standardizing inventory reporting, and piloting demand forecasting tools. Data collection and weekly performance monitoring were used to measure progress. Over six weeks, material availability improved from 72% to 89%, supported by improved internal transfers and faster supplier response. The project concluded with a structured management strategy and stronger cross-functional alignment. The concrete contribution was the development and implementation of a scalable, system-driven inventory improvement model.