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    Case Study

    "A Good Idea"

    In order for companies to be able to outsource the management of their inventory systems, they must find a partner whom they trust. The Johnson Electric Supply Company has been inventorying and selling electrical supplies in Greater Cincinnati since 1907. In the 1980's, we began what was then called "Breadman" with a few of our Original Equipment Manufacturer customers. These customers sent us a manually generated list of their stock levels, and we in turn sent out our truck with the replenishment materials to fill their bins to pre-defined levels. Later, we refined this process to take the logical next step. One of our employees reviews the customer's bins personally, develops the replenishment material list, and delivers the material to the customer site. We put the items away in the proper bins and mail the customer an invoice and/or monthly statement to complete the process. Now, the whole industry is talking about this concept to reduce channel inefficiencies. It's called "Vendor Managed Inventory".

    For an even more efficient solution, the customer should have a good inventory usage data base that can automatically generate on hand inventory reports in real time. This eliminates the need for physical bin reviews, except on an audit basis (such as cycle counting). If this computer generated data is then transmitted to us via Electronic Data Interchange (EDI) or a more direct data link, we can then use a Gordon Graham type min-max approach to generate, pick, ship and bill a replenishment order based on pre-agreed upon bin levels. With this automatic demand notification, the reduction in process steps is enormous and the cost savings can be tremendous for all parties involved.

    The Johnson Electric Supply Company is involved with VMI (Vendor Managed Inventory) at both the customer and the manufacturer levels. Our computer system can link to yours through EDI or other On-Line real time software to fully integrate solutions that are right for you. With over 100 years' experience in the electrical industry, we can help you set the appropriate bin levels and reduce your number of items stocked through redundant item elimination. Let us show you how to reduce the man-hours, paperwork and asset capital your company invests in keeping your electrical inventories at the right levels. We are carefully choosing our partners today. Are you?

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