Monday, June 18, 2012

Profitable Distributors Need an Automated, Fully Integrated Warehouse

According to Dorcy’s IT Director Mark Craddock, “Our customers are reaping benefits from the EDI upgrade and interface. It takes us half as much time to add a new customer, and compliance is nearly 100% from the very first transaction, so costly chargebacks are a thing of the past. Laser printers save us $20,000 per year in printing costs and even more by eliminating errors. VAI’s S2K has yielded measurable improvements at every stage of our global supply chain. The personnel savings alone are allowing us to grow our business without adding new staff because we are using available resources so much more efficiently.”

Successful distribution companies understand that an automated, fully integrated warehouse management software (WMS) solution is essential to achieving and maintaining a profitable business.

Two very key ingredients, needed by all Distributors, were identified by Dorcy:
1.       Accurately monitoring inventory levels and locations.
2.       Real-time access to financial and management reports.

Common symptoms that Dorcy had that clarify the need to make improvements:
(How many do you have?)
·         Operations relied on 25-year-old, homegrown software.
·         The software system lacked a true warehouse management component.
·         The three facilities were not integrated with each other or with the financial system.
·         Inventory variances approaching $200,000 were not uncommon.
·         No real-time inventory information was available.
·         A separate financial package handled accounting functions.
·         Staff spent innumerable hours pulling data from the various systems.
·         Finding product in the warehouse often was a game of hide-and-seek.
·         Product movements were sporadically recorded in handwritten logs.
·         To locate items, personnel relied on recollections or time-consuming physical searches.
·         Shipment delays were common.
·         Many customers required Electronic Data Interface (EDI).
·         Setting up customer accounts typically took three to four weeks.
·         Chargeback penalties for incorrect shipments and missing or inaccurate EDI documents.
·         Spending a fortune on pre-printed forms that staff completed.
·         Keying errors and other mistakes were common.

Customer service delivered to Dorcy and by Dorcy is the key ingredient to a successful solution:

Mark Craddock, Dorcy’s IT Director, relates, “Three things impressed us about VAI: its extensive install base, the size of its support staff and its emphasis on regularly updating its software.  However, it was the technical knowledge and responsiveness of VAI’s staff that carried our decision.  We wanted the personalized service that is the hallmark of VAI.”

Management buy-in and support throughout the organization:

According to Lorie Guerin, VAI Project Manager, “The implementation was a true team effort with Dorcy and VAI working side by side.  Dorcy’s staff had a clear vision of where they wanted to be, and the resident in-house IT knowledge was most impressive.  There was project buy-in at the highest levels of management as well, which primed the corporate culture to accept this dramatic change in day-to-day business operations.”

Efficiency, cost savings and increased profit result:

According to Macy Bergoon, Director of Supply Chain, Dorcy, “The combination of real-time inventory, cycle counting and RF devices has yielded negligible inventory variances. We dropped from a $170,000 variance to less than $5,000 in one year.” Bergoon also estimates that VAI’s S2K has reaped accounting staff time savings of over 50%.

Your partner in technology becomes your partner for success:  

Having the software is important component, but having the right partner is critical for success.  Including a knowledgeable and trusted advisor is a critical resource for success.  There is too much information to widely available to know what will work and what will not. 

Every successful musician, artist, sports figure, business person has a coach and mentor:

A person or organizations success depends on the right mentorship and it is important that the people you work on, even if successful, are tied into a success driven hierarchy.  Dolvin Consulting works with partners VAI and IBM to deliver the right solution to your challenges.  Contact us today to see how we are different.  We care and know that our mutual success is codependent on both of us doing well.

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