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Gaining Competitive Advantage Through Inventory Control

Headquartered in Plymouth, Michigan, FNST’s North American plants are the company’s benchmark for lean manufacturing practices, with QAD Enterprise Applications as its core ERP solution. Managing more than 400 suppliers and more than 8,600 stock-keeping units (SKUs) requires a high degree of supply chain collaboration.

Headquartered in Plymouth, Michigan, FNST’s North American plants are the company’s benchmark for lean manufacturing practices, with QAD Enterprise Applications as its core ERP solution. Managing more than 400 suppliers and more than 8,600 stock-keeping units (SKUs) requires a high degree of supply chain collaboration. It’s critical to maintain constant communication with suppliers to ensure that all plants have adequate materials to meet demand.

“We wanted to cut our working capital to improve our competitive position in our target markets. Reducing our on-hand inventory levels through strategic and controlled process was key to our improvement goals,” says Eric Wolfrom, an FNST Information Systems Manager.

THE SOLUTION: QAD SUPPLY CHAIN PORTAL PROVIDES COLLABORATIVE PLATFORM FOR TRADING PARTNERS

QAD Supply Chain Portal is the practical choice for FNST given its easy integration with QAD Enterprise Applications. As a Web-based supply chain application, no installation or additional hardware is needed. QAD Supply Chain Portal enables seamless trading partner communications supporting delivery of goods and services with better on-time delivery and lower costs.

Continuous visibility into historical daily inventory balances provides procurement with a quick and accurate method to optimize inventory levels for each item. Graphing capabilities displaying quantity on hand with consideration of advance shipping notices (ASNs) provide true dynamic inventory information to support decision making.

THE BENEFITS: COLLABORATION DRIVES LOWER COSTS AND INCREASED SERVICE LEVELS

As a result of implementing QAD Supply Chain Portal, materials managers at FNST have greater flexibility keeping their respective sites replenished without outages. Dashboards and automatic alert tools give internal purchasing personnel and suppliers the flexibility to manage by exception. Materials managers can use the automatic min/max calculation, based on control parameters established by each facility, to monitor and support average demand during changing market conditions. The min/max function is also used to set hi/low “goalpost” ranges for suppliers, allowing them to set their own inventory levels within these margins — and ensure that FNST sites will not suffer material outages.

“There was an average inventory reduction of 17 percent in the first year at the 19 Freudenberg-NOK sites that adopted QAD Supply Chain Portal,” says Wolfrom.

Materials managers find that QAD Supply Chain Portal allows them to focus on value-added activities instead of expedite and routing issues. And, freight expedites have steadily declined by 18 percent. “A standard expedite is around $1,000. Multiply that by the number of high-run materials within our 8,600-plus SKUs, and the cost can be exponential,” says Wolfrom. “It is important to note that we realized these considerable savings above and beyond what we attained from our previous solution.”

Another benefit of QAD’s solution is the ASNs which provide detailed information about pending deliveries so FNST can plan accordingly. It helps the company leverage EDI in a more cost-effective manner.

All this comes with a lower IT price tag; user support is minimal, and there is no need to support in-house servers and client installs. Wolfrom notes, “Our prior application required more internal server support Now, we have reduced that need for support — a nice benefit.”

THE COMPANY: FREUDENBERG-NOK SEALING TECHNOLOGIES

Freudenberg-NOK Sealing Technologies (FNST) is the Americas joint venture between Freudenberg in Germany and NOK Corporation in Japan. FNST is a leading producer of advanced sealing and elastomeric technologies for a variety of industries including automotive, aerospace, aftermarket, fluid power, off-highway equipment, heavy industry and chemical processing. With annual revenues of approximately $1 billion, FNST employs about 4,700 people across 23 manufacturing, research and sales facilities in Brazil, Canada, Malaysia, Mexico and the United States.

To learn more about QAD, please visit www.qad.com

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