It lowers mutual operating costs, optimizes shipment quantities, and achieves excellent service levels for the distributor's customers. It does this by using advanced forecasting techniques. The usage level for each of the 60,000 SKUs is forecast based on prior 24-month usage by each distributor branch. Freight costs are reduced, human errors are virtually eliminated, accounts payable processing is speeded up, inventory turns are maximized, and operating costs are minimized, all while achieving the service level specified by the distributor. The system is now in place at over 200 different locations.
Sales are up.
There is a daily inventory review. Panduit distributors say they are providing far better service to their customers. It's very nice to send birthday cards and newsletters, provide gold cards, or have customers accumulate points or air miles, but the EDI-VMI system goes way beyond that. The company spent many hundreds of thousands of dollars to find out why profits were down, and what Panduit could do about it. In a sense, Panduit was following the lead of the airlines, which in adopting universal standards for reservations, helped the entire air transportation industry to survive and prosper.