Many large manufacturers face challenges when it comes to their inventory. There are many people and departments who need (and are seeking out) a variety of parts and pieces to do their jobs, and typically, multiple physical locations involved. Without a defined and managed system in place, many man hours can be spent looking for inventory, and a great deal of money can be spent to order materials that are already in-house but cannot be quickly located. To address this need, French Gerleman began offering customers a VMI system which takes the burden off of individuals or departments, streamlines the inventory management process, and creates efficiencies and cost savings within the organization. One such customer benefiting from French Gerleman’s VMI system is a major chemical company in the St. Louis region.
The Customer’s VMI Need
French Gerleman’s long-time customer realized they had an inventory management challenge but didn’t have the time or resources internally to address it or develop a solution. They were facing a situation in which there was no centralized responsibility for the stocking and organization of their electrical components. Team members didn’t know where to look for the items they needed, and had no way of knowing what was available in-house. They’d start by looking in the most logical places, but in many cases, wouldn’t discover the part needed. So they’d order another, only later to discover that a co-worker knew just where to look – or had an extra in his or her desk drawer.
There was an internal drain on resources taking place. Things were not well organized, and were scattered throughout the various buildings of the facility. Storage areas were cluttered, and taking up much more valuable shop floor space than needed. In addition, there was no centralized purchasing process or approved vendor and pricing list to guide the ordering of supplies. That means no cost control and no holistic vendor management procedures were in place, resulting in increased costs and duplication of inventory.
How French Gerleman Helped
Once the French Gerleman team had explained to the customer how they could benefit from VMI, the approach was very hands on:
- Physical Audit: The process began with a physical audit of all the materials to be managed. The team found many thousands of dollars’ worth of parts located across multiple buildings on the company’s campus, taking up valuable space and resources.
- Assessment: The team now knew what they had on-hand, and went on to find the answer to the question: what parts did the customer need to keep in inventory? They pulled the key stakeholders into the room to begin determining the actual needs.
- Storage Plan: A systematic and organized plan was put into place to store materials needed on site. This included not only the identification of the best location for storage, but also the specifications for the shelving, drawers and labeling process so that team members would have quick and easy access to the materials, and know exactly where to look.
- Ongoing Management: VMI with French Gerleman takes the responsibility of stocking, ordering, and monitoring materials out of the customer’s hands. Inventory levels and pricing structures are agreed upon in advance, and a French Gerleman inventory management specialist visits the site on a regular basis to ensure that the proper items are in stock, at the right quantities, at all times. The specialist gets to know the customer’s team very well, and can answer any questions while funneling special equests through the system.
As a result of French Gerleman’s VMI system, the customer has experienced significant improvement in efficiency and productivity. Quite simply, the team can now focus on doing the job at hand rather than dedicating many man hours to finding parts. The customer has also been able to reduce expenses by taking advantage of negotiated, preferred pricing, and by eliminating the waste and duplication in their inventory. Finally, the customer has reclaimed valuable shop floor space that had previously been occupied by parts and pieces. What began as a self-described “mess” has been transformed into a well-oiled machine that has directly impacted the customer’s bottom line.
Do you feel that you have an inventory challenge on your hands? French Gerleman can help! For more information
on what Vendor Managed Inventory can do for your facility, please contact your French Gerleman account