NIBCO has 100 years history and $ 400 million revenues. The main product is flow control like valves, fitting, and hangers so on. Compare to other same types of manufacturers, NIBCO wants to provide low price and differentiation of flow control products. In these days, the product quality is not only a requirement among the commodity markets. The value-added services also are good ways to attract more customers. However, when NIBCO wants to give value-added services to customers, the old system cannot suit their needs. The managers of NIBCO decided to use SAP R/3 implementation project, which helps them to deal with issues. From 1998 to 2001, SAP R/3 implementation has run smoothly in NIBCO. As a supply chain business processes, the …show more content…
• Decreased in inventory levels from $102 million to $76 million
• Inventory turns enhanced by 17% (from 3.66 to 4.27).
• Reduction in administrative costs and annual sales by 19%.
• Decreased cost of annual distribution by 20%.
• Decreased costs of annual purchasing by $6 million.
• Overall support staff was decreased by 16%.
• Customer service center staff was decreased by 40%.
• Financial closing cycle was decreased from 10 to 2.5 days.
• Approximately $40 million (per year) decrease in baseline procurement costs.
Discussions:
Q1: The key advantages of SAP supply chain investments
1. Improved customer service by focusing on order accuracy and product available
2. Developed multichannel customer service capabilities and electronic partnerships for customers and suppliers.
3. Increased the effectiveness and reduced the costs of doing business through continuous business process improvements in both its internal and external supply chains.
Q2: Describe what types of transactions are involved in NIBCO’s VMI program?
NIBCO’s domestic wholesale and retail customers have already made an investment in EDI. For those who need to start from the bottom, investment doesn’t only include technology but also ongoing technical support personnel. But another choice for that is outsourcing to an EDI trading partner. 4 different types of EDI transactions are currently involved in NIBCO’s VMI program.
1.
Evaluate the role their inventory plays in the company’s performance, operational efficiency, and customer satisfaction.
Office Depot uses multiple inventory strategies to order products. 90% to 95% of goods are ordered through automatic replenishment, manual replenishment, pull replenishment, and global sourcing are also used depending on channel, volume, velocity and cost. (Office Depot, 2015). The accuracy of the inventory from both a DC and store perspective is critical to the organizations success. Heizer and Render (2014) state that record accuracy is a prerequisite to inventory management, production scheduling, and sales. Accuracy is maintained by either periodic or perpetual systems (p.479). In Office Depot, the stores are required to cycle-count technology items such as laptops, desktops computers, and tablets five days a week. Discrepancies are entered in the system and bounced off the local DC’s on-hand inventory discrepancies. Office Depot is a “blind receive” organization meaning the stores receive pallets of products and simply unwrap and put them away. The only way a store knows if a product is missing is through the cycle-count program. This system was put into place to speed up the receiving process and eliminate unnecessary steps once the product was received at the store level. Office Depot conducts a full physical inventory once a year through a third party and trues up the inventory shrink at this time.
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Therefore the purchasing department will be able to reduce the cost to more efficient and effective process and it will be able to deliver better process.
The ability of the systems to communicate between departments and support the manufacturing demands of the company is a huge advantage for the entire company. The new system would increase strategic processes for the different departments from planning to manufacturing to distribution to accounting by using the resources more efficiently. NIBCO would be able to identify discrepancies within their planning, purchasing, or manufacturing stages immediately. By decreasing redundant processes the firm is able eliminate waste in order to increase their profit. Another advantage for NIBCO was in establishing a timeframe in their strategic plan with a ‘go live’ date for the implementation of the IS system which meant that the company would be able to resume normal operations. A typical timeframe of installing a new IS system in a company typically occurs within a three to five year plan and NIBCO planned on having the software installed and operating within twenty-four months to limit the interruption for the
H. C. Stark Inc. invested in the SAP R/3 Enterprise Resource Planning software for the company but, only the finance dept. uses the software while the production, scheduling, shop floor scheduling and raw material orders and are still processed manually. These departments still believe in using the paper method of processing the transmittal of the sales orders from customers to the operations department. This process is longer than incorporating the software to accomplish the same tasks. Starck doesn't make full use of the functions in SAP R/3. In fact, schedule misses were mostly due to equipment failure. Mike from the sales dept stated there was an "informational
Through analyzing the information provided in the case, the purpose of this paper is to identify the benefit and complications of implementing NCI’s ordering process (ICON, Manugistics) and provide recommendations of how NCI should move forward with its new system.
Internal efficiency through the decrease of marketing costs, reduction of order taking and fulfillment costs and improving the retention rates of our customers.
Effective supply chain management can provide an important competitive advantage for a business marketer, resulting in improved communication and involvement among members of the chain, increased motivation, and decreased costs. Tracking the movement of and demand for components used to manufacture a product across a variety of potential and actual suppliers, provides insight and the ability to respond instantly to shortages, surpluses, and changes in market conditions. It seeks to optimize production, decrease manufacturing time, minimize inventory, streamline order fulfillment, and reduce cost.
Along with reducing the amount of middlemen customers have to deal with, added to his reduced expense structure which in turn proved to be cost effective.
The Scientific Glass, Inc (SG) is a midsized company in the specialized glassware industry producing for and supplying to research facilities and specialized laboratories in its market regions; North America, Europe, Asia Pacific and rest of the world. The company is facing an increase in inventory level balances with too much capital tied up in inventory preventing it from using its capital towards international expansion. Evaluating other options on the basis of effects of SG's previous attempts at
Inventory management has two very different, but effective methods: Vendor managed inventory, and consignment inventory. A company may choose to utilize either of these two methods to manage inventory. If a company is able to manage inventory, they will be better able to work the company's capital to the fullest extent. The following paper will identify the differences between the two as well as identify what type of company is best suited for each method.
Over the last four years, I’ve delt a great deal with RFID supply chains, and have seen first hand the positive advancements that are made with them. If given the opportunity to lead this project with your company, I believe I can close the gap between Intel and it’s competitors.
Inventory itself is a list of products that a company has available for sale to customers. So what is Inventory Management? By definition according to BusinessDictionary.com, “Inventory Management is policies, procedures, and techniques employed in maintaining the optimum number or amount of each inventory item”.
E. Continued focus on improving efficiency and effectiveness in the organisation, from procurement, to supply chain to customer service delivery.