Customer Gets Lean Makeover with Unique VMI Program
An Original Equipment Manufacturer
- Incorporate Lean culture into purchasing and material management processes.
- Decrease touches on order entry and inventory.
- Minimize freight costs on unnecessary orders.
- Reduce overhead on inventory.
- Personal attention from dependable distributor partner.
Carlton-Bates brought in a team of Lean experts to establish a Vendor Managed Inventory (VMI) program. As a bonus to the OEM, CBC hired a part-time VMI technician who will service the customer on a weekly basis at the customer site.
- Carlton-Bates Company established an out-of-box VMI plan based on the customer’s unique needs.
- CBC assigned a part-time VMI technician, exclusively dedicated to the OEM customer. The technician will service the customer weekly and take care of inventory counts.
- The customer moved from 16 vendors to just one – Carlton-Bates, based on the wide-ranging plan presented by CBC.
- The consignment program delivered a material cost savings as well as a process savings.
CBC Team Gives Lean Assessment
When companies consider Lean workflow processes, they typically look at manufacturing. It’s about streamlining work areas, production facilities and shipping procedures. CBC knows that going Lean in an industrial environment can mean much more.
Recently, when a large original equipment manufacturer asked their Carlton-Bates account representative for assistance in building a comprehensive materials management plan, implementing Lean was the primary goal. The CBC sales representative gathered a team of managers, including the Lean Program Manager, to analyze all current issues. The CBC team then developed a consignment program to streamline the purchasing process that would generate operational and materials savings.
Carlton-Bates also reviewed the products that the client was purchasing. They negotiated with key supplier partners to find additional savings. These savings would allow them to tactically plan their orders better and beat out their rivals for new business.
Inventory Management Takes on a New Twist
With the CBC inside sales representative managing the back end of the program and the field sales representative working with engineers on the plant floor, CBC decided to assign a part-time VMI technician to be fully dedicated to the client and the new VMI process. CBC’s VMI technician would count the inventory and manage the product on the shelves weekly and was under the direct supervision of the CBC inside and field sales reps. The Lean principles put in place were distinctive to the OEM and proved to be an effective solution to their most critical needs.
The client was so impressed with the plan that they dropped more than a dozen of their existing vendor relationships and awarded the business to Carlton-Bates. This consolidation of vendors cut costs for the client. The Lean project also enabled the team to identify growth and additional cost-cutting opportunities in engineering and manufacturing.