May 2002 - Because we deal with a variety of retailers - from Wal-Mart, Kmart and Target to smaller bedding boutiques - we've been focused on getting a better handle on our production requirements," says Kenneth Barker, VP of information technology for American Textile. American Textile is a manufacturer of bedding products, including mattress covers and pillow protectors. The company had been doing vendor-managed inventory (VMI) on an ad hoc basis, but they were struggling with it, according to Barker. "This past year we made more of a concerted effort to do it in a more organized and consistent fashion," he says.
CGs that practice VMI say taking on the job of determining order size and timing of shipments to retailers has proven successful in reducing stockouts and increasing retail inventory turns. VMI elevates the reliability of the data, typically based on retail point-of-sale and inventory data.
One of the key components of American Textile's success with VMI was finding the right technology, Barker says, and bringing that technology in-house. Another option would have been to add features and functions to an existing report writer that was already being used by the sales department, but the company determined it would have been too costly and time-consuming to upgrade that system to perform all of the functions necessary for VMI.
American Textile eventually chose the Velocity VMI system from Vendor Managed Technologies. The system was installed in November. "They did a good deal of the work over the Internet, and then they came to our offices for three days," Barker says. He says one of the most time-consuming parts of the installation was loading the application with information for the past year.
The installation did have a few challenges, Barker noted, but the problems centered primarily on variations in the EDI formats supplied by the retailers. "There is a book of EDI standards that is about 2 1/2" thick. Many of our trading partners view it as simply suggestions, rather than strict guidelines for how they are supposed to format their EDI communications," he says. "The format varies wildly from customer to customer. One of the nice things about the system is that it can take these wildly divergent formats and present the information in a consistent interface."
Even though the system is still in the early stages, Barker says the improvements in customer service already make the investment worthwhile. "Just based on feedback, customers are pleased with the level of information and service that the system enables us to provide." Looking into the future, Barker foresees adding a forecasting module as soon as one becomes available.
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