SOURCE: Datalliance

Datalliance

February 04, 2010 08:49 ET

Heavy Duty Industry Distributor Improves Bottom Line Results With Datalliance Vendor Managed Inventory

Kroeger Equipment and Supply Company Partners With Key Supplier to Increase Sales, Reduce Inventory, Increase Inventory Turns, and Improve Efficiency

CINCINNATI, OH--(Marketwire - February 4, 2010) - Datalliance today announced that Kroeger Equipment and Supply Company, one of the largest aftermarket parts distributors in California, has partnered with Velvac, one of their key suppliers, to implement Datalliance Vendor Managed Inventory. Kroeger has realized increased sales, reduced inventory, increased inventory turns, and improved process efficiency as a result of participating in Velvac's VMI program. The complete case study article can be viewed at http://www.datalliance.com/wpandarticles.html.

Velvac supplies Kroeger with a large number of brass parts and products. Bill Lawhead, Kroeger Corporate Purchasing Manager described their ordering process prior to implementing VMI. "There are over 300 individual line items that we reviewed weekly to determine what we needed to order. We spent a lot of time evaluating the past week's demand and current inventory to determine what parts to order and in what quantities. We didn't always have a clear picture of end customer demand, as we were looking at history and not necessarily anticipating future demand. Sometimes, we were ordering too much of some items and not enough of others."

"From a business perspective, our challenge was to maintain a high level of customer service, but manage our replenishment processes and inventories as cost-effectively as possible," stated Lawhead. "Customer service is a given for us, though the efficiency of our process has a major impact on our profitability. When our customers need a part, no matter what the part might be, they expect us to have it in stock."

"Vendor Managed Inventory has reduced our replenishment process time by 75-80%," stated Lawhead. "We are much more efficient -- our buyers can now work on more value added activities. Velvac's VMI program has also made it much easier to do business with them." In addition to process improvements and time efficiencies, Kroeger has also realized bottom line business results. "Our business results are pretty impressive," explained Lawhead. "We increased sales 19%, reduced inventory 34%, and increased turns by 73%. The result was a 10% increase in profits on our Velvac product line, while at the same time achieving a 99% in stock or customer service performance. Every one of these is an important metric for our business. The combination of these positive results also shows that we are better aligned with end customer demand, are moving more products, and are doing so more profitably."

Lawhead concluded, "Our attempts at VMI with other suppliers required a lot more effort on our end, were not as easy to implement, and in the end just not as successful, Datalliance got our data loaded, and we were up and running in minimal time. We now have a much stronger relationship with Velvac with more trust and collaboration on both sides. Velvac really 'gets it' when it comes to working with their distributors. Velvac's VMI program makes them easy to work with and provides us with business benefits that help our bottom line."

About Datalliance

Datalliance is a leading provider of collaborative commerce services, and the world's largest independent VMI service provider. Delivered via the Internet using the 'Software as a Service' (SaaS) model, Datalliance solutions make it easy for suppliers and their customers to establish sales and inventory management relationships that fully align business objectives, improve collaboration, and streamline supply chain operations. Datalliance manages billions of dollars in orders, millions of SKUs, and thousands of locations for leading Fortune 1000 companies in a number of industries. For more information about Datalliance, visit www.datalliance.com.

Contact Information

  • Contact:
    Brian Lindner
    Datalliance
    513-791-7272