Field Figures: How Lean Benefits Vendor Managed Inventory Systems

“Lean is just part of the fabric of who we are as an organization. Everybody is empowered and challenged to think lean, to think continuous improvement, to always look for a better way to do things. I think as an organization we’re extremely proud of what we do and how we do it, but at the same time we’re always willing and looking for better ways to do the way we do things we do today. So there’s a unique blend of being fired up about what we’re doing and I’m proud of that, but at the same time we’ve got to continue finding better ways to do things going forward.” This is a quote from Field President, Jim Derry, in a recent vlog we did at Field.  At Field, lean isn’t something we do. It’s what drives us and guides us to do things better.  Every team at Field understands lean is essential to the way we do business. All the teams at Field bring great passion to this subject. I’m going to talk about one team I’m very proud of, which is our VMI (Vendor Managed Inventory) team.

The majority of the day for Field’s VMI team consists of being onsite at the customer’s facility. We have the unique opportunity of making a lean impact not only at Field, but also at our customer’s locations. To date in 2015, the VMI team has uncovered $48,243 in lean savings with a goal of $60,000. Our leanVMI 4 discoveries are as basic as changing to a closer location where we get our oil changed, to as robust as revamping our customer’s VMI systems.

One common lean initiative we create is with our CIC (Contract Inventory Control) process. The objective of the CIC is to review the usage patterns of the customer’s parts in each location, and use that data to adjust inventory levels to meet our customer’s demand. By comparing usage trends, we can always make sure our customer has the right parts at the right time, in the right spot, without having too much inventory on hand.

To provide an example of how our lean processes benefit our VMI customers, at one particular customer, we noticed they carried a lot of the same inventory in multiple bins near each other. By working with the customer and analyzing their consumption patterns on each bin, we were able to eliminate four of the seven locations where that same part was being stored. We decreased their inventory level in that production area from $6,130 to $4,855, which is a 21% reduction, while making sure they still have enough parts so they don’t run out.

Using lean processes provides many benefits to Field, but more importantly what we’ve learned to do in our distribution centers is really paying off for our customers.  Our Vendor Managed Inventory programs are created with lean principles in mind to help cut-out inefficiencies and non-value added activities so our customers can get back to managing other value added activities. As Jim said, “Lean is just part of the fabric of who we are as an organization.”

Author: Kyle Runte | Field VMI Representative