F.T. Industrial Supplies Ltd is committed to working with you to develop the very best supply chain solutions for your business. Two of our case studies show how we ensure FTIS is a highly responsive and innovative supply chain specialist - saving you time, and making you money.
Case Study 1: Direct to Line: DTL, Push – Pull System
Manufacturing client number one, one year project
In 2002, we analysed whether or not JIT was meeting manufacturing clients requirements to reduce the cost of inventory. Results after six months consultation with the client’s procurement team, union and production staff saw the creation of a direct-to-line supply chain.
Significant gains made:
- Project covered approximately 500 line items.
- All components delivered by FTIS were delivered to the client’s production line.
- Maximum inventory held by the client was 36 hours.
- Client warehouse space was reduced by 75% enabling a new production line to be installed.
- Client store staff numbers reduced as all inwards was done by FTIS personnel.
- Stock accuracy is maintained above 99.99%, up from 63%.
- Due to increased supply chain transparency, inventory was reduced to four weeks, down from an average of 6 months)
- Client inventory write offs due to lost inventory eradicated.
- Client liability due to the supply chain bullwhip, EOL(end of life) and supplier lead-times, reduced substantially.
- For each financial year only one blanket purchase order is raised as opposed to individual and daily purchase orders prior.
- Client forecast (material demand) the only document used by FTIS to place orders against its suppliers.
An EDI system (electronic data interchange) was created to transfer invoices to reduce client accounts processing. This is automated, errorless and occurs on a daily basis.
Case Study 2: Vendor Managed Inventory: VMI, Pull System; Made to Order
In 2004, weset up another facility in Brisbane. On completion of the JIT conversion with another manufacturing the client, we found inventory was reduced substantially. In February 2008, the project was complete with similar gains achieved by the DTL approach outlined above, plus the following important additions:
- Client now holds in its financial accounts $Zero inventory that it procures from FTIS.
- Inventory saving for the client based on the February final pull down of inventory was AU$981,678.99.
- This figure represents around 30% total raw material inventory the client procured.
- The project covered only approximately 110 line items.
- All components delivered by FTIS were delivered to the warehouse daily.
- Client warehouse was effectively run by FTIS staff for the FTIS-supplied components.
- Client staff would only pull from the VMI location. They no longer did any inwards function, cycle counting or stock management.
- Maximum inventory held by FTIS was 60 hours or less at the client site.
- Stock accuracy now maintained by FTIS at 100% measured. This includes FIFO management.
Based on these successes, the parties have started work to reduce costs even further in the supply chain.