VMI Case Study - Electronic Equipment / Power & Technology Solutions

Customer Challenge

As a successful British manufacturer for over 30 years, supplying power and technology solutions into the fast-moving commercial office furniture environment, the management team were faced with a growing logistical problem. The purchasing and handling of over 400 stock lines of category-C fastener products was becoming more and more challenging. Regular stock shortages caused on-going problems leading to production downtime and customer service failures. The stock management process that had developed from a traditional in-store facility and backed by a bit part third party inventory service lacked any routine controls of stock levels or stock rotation. The process was further compounded by the lack of product availability at the point of production.

TFC Solution 

The manufacturer considered a number of options to improve performance and sought the advice of several suppliers. TFC were aware of the problems being faced by the purchasing and production teams; after carrying out a thorough site survey TFC proposed a direct point of use Vendor Managed Inventory (VMI) system and worked closely with the customer to find a system tailored to their needs. The existing Central Stores VMI system located within the manufacturing plant was removed and all stock was relocated closer to where it was needed with purpose-designed bins and racks. Part of the agreed proposal allowed for barcoding of each part, giving full control of stock levels and stock rotation to help achieve optimal inventory performance.

Customer Outcome

Following implementation, the agreed solution resulted in a streamlined VMI stock system for standard/regular C-class parts that had eliminated stocking costs, removed stock shortages, greatly improved production efficiency and gave positive cash flow benefits. The reduction in manpower means the customer has benefited from soft cost savings and with further sourcing work TFC were able to deliver reduced unit pricing through years of product knowledge and worldwide manufacturer partnerships. The net result for the customer teams was significant bottom-line cost savings and greatly improved working practices.