Overcoming Inventory Overstock and Inefficiencies: A General Manufacturing Company’s Transformation with MSC

This company is a provider of components, assemblies and finished products to major OEMs across multiple industries, including agriculture, construction, mining, commercial and industrial, and power generation. They offer integrated fabrication, stamping and assembly capabilities, which allows them to determine the right process for the right product need in serving their customers.

To learn more about MSC’s BNA, our unbiased process, and data assessment of your indirect supply chain, designed to identify customized solutions to empower performance, generate savings and maximize profit potential, call us at 800.645.7270.

INVENTORY OVERSTOCK, STOCK-OUTS, BACK ORDERS, INEFFICIENT ONLINE PROCUREMENT

Conducted an extensive operational site assessment through MSC’s Business Needs Analysis (BNA) to identify opportunities to achieve this customer’s goals for an automated and strategic inventory management solution.

Goals included:

• More favorable financial terms

• Automated inventory management – additional point-of-use vending

• Simplify online ordering for spot buys and unplanned needs

• Vendor/PO consolidation and SKU standardization

• Eliminate overstock, stock-outs, and back orders

• Value-added training

MSC IDENTIFIED SEVERAL SOLUTIONS TO MEET CUSTOMER’S CHALLENGES

• Implemented additional point-of-use vending and VMI

• Build a customized inventory management health scorecard report

• Engaged MSC teams of specialists – Metalworking, Safety and Fluid Connector specialists

• Simplified ordering and approval process for spot buys and unplanned needs by using mscdirect.com

• Established a freight program, pricing incentives and extended payment terms

FIRST YEAR PROJECTED PROFIT IMPROVEMENT OF $170,321

• Reduction of 200 POs per year

• Consolidation of 25 indirect suppliers

• MSC capital investment in additional vending and VMI

• MSC investments in value-add services

• Improved financial terms and price reduction on high usage SKUs

Established a cadence of quarterly Customer Improvement Reviews (CIR) at which MSC and the customer collectively review a “scorecard” to evaluate progress on identified goals and look for improvement opportunities. In addition, we continue to work with our specialist teams and the customer to identify improvement initiatives to keep their team at their highest levels of safety and productivity.