Vendor Managed Inventory
Majac has been doing a modified form of V.M.I since 1991. We have changed from boxes and cards, to custom labels with bar codes and customer specific information. Today, the theme remains constant; relieving tedious repetitive work from individuals who can better spend their time and resources elsewhere. In most cases the value of the product being monitored is insignificant compared to the value of the products being worked on. Holding up production, or having to move machine set-ups due to a lack of consumables can directly effect the “bottom line”.
Our spin on Vendor Managed Inventory differs from that of the general line supplier. Our personnel have the ability to recognize and differentiate what products are in the bins for replenishment. Our competition tends to take a count of the item in the bin, and replenish based on qty’s counted rather than actual product in the bin. We have been able to differentiate the products and in most cases restock only the required bins. We don’t use this as a slight against our competition; rather we use this as another tool to set us apart. We try to remain focused, and only manage product that directly relates to our area of expertise.
CASE STUDY #1
A large local manufacturer of Stainless & Aluminum parts had a V.M.I. contract with a general line supplier. The contract covered the Assembly, Welding & Machining areas. Most of the contract was working well – with the exception of Machining. Product was not delivered on time and inventory levels seemed to be in a constant state of “flux”. Our solution was not to take the contract on all items for all areas. We took over what we can service – cutting tools! We cleaned all areas, and provided an up to date inventory to the customer. We used an inventory level based on one month’s usage of product, and began to work with the system. We kept inventory levels high until we could establish a true usage factor. The competitor used a level that suited his own interest – rather than having to monitor to often, he overstocked many bins. After the three month point, levels were pared back and are running on 10 days inventory. We scan and replenish weekly, and have eliminated numerous stock-out issues that occurred in the past.
The other large benefit to the customer related to improving of products for the application. We have changed the brand and quality of the products to suit the use. They have realized gains in both productivity, and total costs of acquisition.
