Custom Inventory Management Solution
We did an analysis of a customer who was placing large repeat label orders. We found that the freight costs incurred where very high, and the way in which work was placed was a strain on our production capabilities. We needed a solution that would not only serve our customer's needs, but drive efficiency into our own operation allowing us to provide better pricing.
Working with the customer we determined their needs, and developed base line projections for usage. The customer places purchase orders for either 6 month or EAU, depending on usage. We placed an inventory cabinet in their manufacturing facility, with bins located at the point of use. The bins are set with min/max levels. When a minimum level is reached, it triggers a replenishment order from the cabinet. We visit their facility once a week to replenish bins, and maintain cabinet inventory. Having the cabinet inventory provides the capability of extra stock to accommodate production surges and avoids missed deliveries Invoicing is also performed bi-weekly, reducing the amount of invoices that must be processed.
Since we monitor the stock levels, emergency orders are rare, and individual invoices are eliminated saving 3 to 4 hours per week in processing. Because we visit their facility weekly, freight costs are reduced by $4,000 to $5,000 per year.