OpportunityOur client is a German-based manufacturer of mechanical components for the metal working industry and enjoys a unique, highly differentiated position – though not exclusive or without competition. Although it had, through direct sales efforts by its German key account group, established a solid working relationship with several US OEM customers, the company chose not to establish a US operational entity for several internal reasons. The fact, however, that it managed order fulfillment and the supply chain to its US customers directly from Germany started to create numerous challenges and ultimately might have threatened the long term sustainability of the customer relationships, despite its unquestionable product benefits.
Action
We were retained to assist the client in improving its supply chain structure that would ultimately provide its customers in the US with a transparent, virtual “just in time” product availability, eliminating the need for bulk ordering, shipments and storage on the customers’ site.
Results
With the assistance of one of our local partners, and in close cooperation with the client’s German organization, we secured the services of a local logistics company. Together, we implemented a comprehensive on-line order processing and inventory management system that directly tied into the client’s German ERP system. The local logistics partner and the US customers have instant and unrestricted visibility on all aspects of order and inventory status, and the logistics partner provides a fully automated JIT delivery system, which, for certain products includes a sophisticated Kanban arrangement. In addition, quality assurance processes are maintained locally, incl. any (though very rare) returns, and invoicing of supplied products is automatic. The client-customer relationships have been strengthened and continue to be solid for the past years. The supply chain has been highly reliable with a fulfillment ratio >98%.
We would be glad to share details of our work without identifying the client’s name or specifics which would allow identification of the company or its competitors.
