Management + Systems

By Julian Adams, managing director at Apex Supply Chain Technologies® Ltd

In some environments, stock-outs caused by inefficient third party inventory management can be more than a headache – they can lead to significant contractual penalties for distributors.

Even without this prospect, unavailability of a key fastener is, at best, a major irritant. At worst, fastener stock-outs make it even tougher to adhere to already pressured production schedules – placing further pressure on distributors to find ways to guarantee stock availability.

Traditional bins: Stuck in the past
Often a traditional ‘dumb’ bin arrangement holds fasteners and similar products – small parts and supplies – which keep the business moving. When compared with the rest of the facility, however, this approach feels out of place and dated, while offering little visibility into the flow of materials. This can lead to multiple issues that can severely impact the bottom line.

Employees know the bin system does not work well, so they take more items than they need so they do not run out. However, this compounds the original problem, creating stock-outs for others, impacting overall productivity.

Typically, distributors make two visits for what is effectively a single task – one to count what is in each bin and another, several days later, to restock.

Meanwhile on-site management deals with stock-outs by placing costly emergency orders or buying from a local supplier – probably paying a price premium. Many managers also have to overspend on inventory to keep a backup supply of stock on hand.

One company’s approach
Assembly Fasteners Inc (AFI), a US-based global distributor of products and services to industrial customers, was operating with many of these problems with its bin systems, located at customer facilities. AFI specialises in vendor managed inventory programmes, within which it manages its customers’ project inventory levels.

For AFI and its customers, the old method of restocking bins was time-consuming and did not represent best practice. For example, to service one account with 200 part numbers, an AFI technician would visit the customer to check each bin with a scanner to determine restocking needs. The information would then be uploaded to the customer’s internal systems to generate an order. AFI would then have to return to restock.

AFI investigated automated bin systems, but ruled most of them out for being cumbersome or difficult to use – until it saw ACTYLUS™ smart bins from Apex Supply Chain Technologies®. AFI deployed ACTYLUS smart bins with two contract manufacturing customers, operating from facilities exceeding 9,000m². Able to detect stock levels by weight of product in each compartment, ACTYLUS automatically sends current inventory levels for each bin to the Apex Trajectory Cloud™ platform.

Trajectory alerts AFI and its customers when those levels drop to pre-set minimums. Trajectory reports are viewable anytime and anywhere on smartphones, tablets and computers. This real time visibility immediately eliminated the need for counting trips, safety stock and emergency restocking. Multiple configurations in bin size and number of rows are available, making ACTYLUS customisable for any setting.

After installing ACTYLUS, AFI realised immediate time and cost savings. Technicians who previously spent so much time on manual counts immediately regained a full day each week because ACTYLUS checks each bin for them.

With Trajectory Cloud automatically notifying AFI to reorder when inventory levels reach pre-set minimums, there is no concern about stock-outs, making safety stock unnecessary. AFI pulled back on the levels of inventory that it placed in the bins on consignment – returning more than €10,000 of inventory in one location and nearly €4,000 in another.

“Apex is providing a solution that really has strong visual appeal. It replaces dirty, mismatched old steel shelves with a clean, well-lit system. When people see it, they talk about how they want to move more of our products into the ACTYLUS smart bins, which helps us expand our partnership with those customers,” commented Hugh Watson, president at AFI.

“The ACTYLUS system gives us a different look and appeal. People stop to look at this when it’s installed and it helps us to separate ourselves from competitors that are often right next to us on the shop floor,” concluded Hugh.

www.apexsupplychain.com/actylusuk