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05.28.2024

VMI Services Customer Success - VMI Case Study #1

VMI Services Customer Success: Save Time & Space with an Organized, Centralized Stocking Location 

A manufacturer and service provider of energy control and optimization solutions for aerospace and industrial markets had an annual goal to increase internal efficiencies. One issue to address was to reduce the excess time employees spent searching for, finding, or purchasing products needed for their day-to-day manufacturing process. 

The Problem 

 

The time spent finding products such as fluid power fittings, connectors and hoses created a critical efficiency drain.  

With multiple production lines throughout the facility, employees were required to walk to a centralized stocking location when an item needed replenished at their workstation. In addition to the time spent walking, the employees experienced difficulties locating the needed parts in the stock area.  

This process became so inefficient that the Warehouse Lead estimated half of his time was spent assisting with product location. To make matters worse, once they identified the item, the employee would take what they needed without reporting it to anyone, which led to inaccurate inventory counts and additional expenses associated with extra purchase orders (POs).   

Safety was another primary concern. Using the wrong fittings or hose components could lead to burst lines and injection injuries. These types of parts can be used in heavily regulated industries, and a manufacturer’s reputation can be severely damaged in these circumstances. 

This facility also shares a language barrier, creating an elevated challenge for the Warehouse Lead to communicate what type of product it is and where it is located — resulting in excessive time spent having to show versus tell.  

The Solution

To design the best solution for this manufacturer, MCE’s VMI team conducted a free on-site inventory and storage evaluation, which resulted in a multi-part proposal to bring organizational efficiency back to the operation.  

The team suggested providing on-site service offerings to the customer, including MCE’s Vendor Managed Inventory (VMI) program. The following program was proposed:  

First, we would organize their fittings by type and developed a bin storage solution using color-coded bins and labels to sort fittings by fitting type, by thread size and type, and by pressure rating for universal stocking at each stocking site. Because this customer uses standard thread, national pipe thread and metric thread, color-coding bins by thread type would also make product identification easier than ever for all team members, regardless of language needs.  

Secondly, our VMI team would establish dynamic minimum and maximum product levels for product replenishment at both the individual workstations and the centralized stock location. This would ensure the right products were always available and stocked throughout the facility, exactly where team members need them. No extra steps would be required to obtain parts to keep the lines running. 

Third, we would provide detailed usage reports to increase the customer’s ability to make real-time decisions, reducing last-minute and one-off purchases. This would benefit the purchasing department as well. 

The Results

  

The customer decided to move forward with the VMI solution, allowing MCE to complete the reorganizational efforts and color-coded bin set-up for continuous management of inventory.  

Using ClearSpider VMI technology, the min/max levels established almost eliminated the time employees spent searching for product by ensuring the product was available when and where needed.  

The color-coded bins helped employees identify the proper fittings without additional consultation, significantly reducing errors and freeing the Warehouse Lead to focus on their primary responsibilities.  

With the monitoring capabilities afforded by MCE’s VMI software, the customer was able to execute data-backed replenishment at the centralized location, further reducing the time spent by employees searching for product when they needed to leave their workstation.  

This same reporting provided visibility into product usage at the facility level AND at the individual station level, providing real-time data visibility for the customer. This enhanced visibility into inventory items helped to reduce emergency and unscheduled purchasing, reducing purchasing time and costs.  

An additional indirect benefit of our VMI program was improved training opportunities for team members to learn and identify commonly used items like fittings, hoses and other components. 

Interested in an optimized inventory plan for your operation? Get in touch with our VMI experts and ask about our FREE inventory evaluation. 

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