December 15, 2010 09:30 ET
Siemens Uses Datalliance VMI to Deliver High Value to Channel Partners
CINCINNATI, OH--(Marketwire - December 15, 2010) - Datalliance announced the Vendor Managed Inventory (VMI) program success realized by Siemens and Echo Group, Inc. The electrical industry is very competitive, as multiple suppliers offer similar products and pricing strategies. Siemens understands this and has taken action to use Vendor Managed Inventory (VMI) to provide added value to distributors in addition to their extensive line of quality products.
Celia Dayagi, Siemens' Program Coordinator, said, "Several years ago, we were looking for ways to differentiate Siemens with our key distributors and position Siemens products as the preferred products within the electrical distributor network. We recognized that inventory represented the second highest cost for our distributor partners. We decided to focus our efforts on sharing the inventory risk while increasing shared market intelligence. Our goal was better decision making that would allow us to identify and take advantage of market opportunities."
Echo Group Inc. is one of Siemens' leading distributors and one of their first channel partners to collaborate using VMI. VMI gives Siemens and Echo a forum to discuss key inventory management issues. "This dialogue has given us tremendous insight into Echo's strategy. In most cases, we found that their desire to provide high customer service levels caused them to carry too much inventory," said Devyn Anderson, Siemens' Channel Sales Engineer for Echo. "Within the first six months of participating in our Inventory Collaboration Program, Echo realized significant results at their first two pilot branches. Turns increased 73%, inventory went down 27%, and sales increased 30%. To the delight of everyone, they were able to realize these gains while maintaining 99-100% customer satisfaction."
Jerry Espeseth, Purchasing and Inventory Manager at Echo, further clarified VMI's appeal, saying, "We've been able to reduce overall inventory. But, more importantly, our inventory product mix is much better, as VMI ensures that we have the right inventory on the shelf when the customer needs it. VMI has had a significant impact on eliminating stockouts, which is the primary reason our branches have bought into the VMI concept so well. We plan more effectively and expend less effort checking on and expediting orders. By improving data quality, reducing the number of orders by almost 50%, and eliminating the time consuming process of creating PO's and verifying individual line items, we've improved productivity by 25%."
Read the entire Siemens/Echo Group article at http://www.datalliance.com/successstories.html.
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.