Barlows CAT improves service while optimising stock levels in R1.2m VizAbility deal

Barlows Equipment Company (BEC), the exclusive Caterpillar heavy equipment distributor in South Africa, has increased its customer service performance and reduced its parts stock holding levels by 30% since the R1.2 million implementation of JSE-listed Ixchange`s VizAbility strategic inventory management system less than 9 months ago. VizAbility forms part of the Ability suite of business management solutions.

BEC`s Anton Fourie says the company was looking for an inventory optimisation solution that would actively manage changing business cycles. "The high cost of carry of parts inventories had become unpalatable and we needed a rapid solution to manage this better. We had already managed to reduce lead times and we needed a system that could take advantage of this and drive down inventories."

The company has launched nine strategic initiatives to target those areas in BEC that are perceived to have the most potential to improve customer service while contributing to better profits for both parties. One of these strategic initiatives was to optimise the parts operation.

Although automated inventory optimisation has been a part of BEC`s logistics management for more than 10 years, it was believed that a "stock to forecast" inventory management system would be able to further optimise inventories, even in BEC`s changing marketplace. VizAbility was set the task of implementing latest supply chain management best practices for reducing investment in inventory while protecting and improving the company`s customer service levels.

"In a business where the market is rapidly changing, businesses want to buy inventory according to what they are going to need instead of what they have needed historically - which inevitably leads to an over-stock situation."

BEC has a daily inventory-ordering review period that covers around 350 000 lines of stock. By using VizAbility to ensure that only the correct parts are purchased and that surplus inventories are identified for re-distribution, BEC has so far reduced overall inventory value by 30%. "Along with a decrease in inventory holdings, we have also measured an increase in service levels," says Fourie. Total customer service levels of stocked lines are above 90%, while our fastest moving lines have a 95% service level"

Although BEC has more than 50 stocking locations around the country, the whole stock control system is run and managed from a central location with one person responsible for ordering all new stock daily.

"The total effect of the inventory optimisation system has meant that BEC has more than covered the cost of implementing VizAbility in the first six months of use in terms of bottom-line savings and at the same time improved customer satisfaction levels " concludes Fourie.