Cutting stock levels by one-third, upping part availability levels to over 92 percent and reducing order lead times by 30 percent are just some of the many benefits that Ability Corporation`s VizAbility inventory optimisation solution has brought to Perkins Power, a wholly owned Barlow Ltd. subsidiary.
Perkins Power is the Southern African master distributor for the UK-based Perkins Engine Company, and has been doing business since 1998. Perkins engines are used in equipment in the earth moving, mining, material handling and agricultural sectors, in marine and electrical power generation applications. There are in excess of 100 000 Perkins engines in Southern Africa.
+ACI-When the previous distributor closed down we purchased their entire Perkins parts stock,+ACI- says Paul Deppe, managing director of Perkins Power. This entailed a R12 million investment.
Striking a joint venture partnership with Massey Ferguson South Africa for the sale, support and distribution of Perkins parts was the next step. The agricultural giant undertook the distribution and logistics arm of the JV, while Perkins Power took on the sales and marketing functions.
+ACI-After six months we realised that we had a lot of stock that was not moving according to our expectations,+ACI- continues Deppe. +ACI-While Massey Ferguson SA`s stock control system was well suited to that company`s functions, the inventory system did not meet the demands created by the JV.+ACI-
+ACI-Stock was a R12 million black hole about which the only thing we knew was that we had to move it quicker,+ACI- says Deppe.
Based on a number of personal recommendations and case studies, Perkins Power and Massey Ferguson SA purchased the VizAbility software from Ability Corporation in March 1999. Full implementation took just under six months to complete.
Interfacing directly with Massey Ferguson SA`s transactional software, VizAbility is fed with daily data from all the sales, demand histories, current stock on hand, orders and surplus from customers. VizAbility then processes the raw data and presents it as intelligent information upon which further purchasing decisions can be based.
+ACI-Once the decision is taken to order certain parts, in accordance with existing stock levels and recorded and projected demand, the actual order is also processed within the VizAbility package back into Massey Ferguson SA`s transactional system,+ACI- says Walter Leicher, general manager of VizAbility.
+ACI-VizAbility enables Perkins Power to accurately determine stock forecast levels, right down to component level, and give management real information upon which to base strategic decisions,+ACI- continues Leicher. This results in real bottom line savings.
In a year, the stock levels dropped some 33 percent, in which time the capital cost of the system has been more than paid back.
Further savings were effected by the reduction in the order lead time. +ACI-The order administrative processing time was cut from two weeks to one day using VizAbility,+ACI- says Leicher. +ACI-Manual errors were eliminated as the entire process became automated.+ACI-
+ACI-Our customers also benefit from the higher service levels,+ACI- says Deppe. +ACI-We can commit to a 24 hour delivery to any dealer in South Africa. VizAbility has made it possible for us to ensure that if an emergency order is placed by a dealer anywhere in the country before 5pm, the part is delivered to that dealer the next morning.+ACI-
+ACI-This has mainly been possible due to the stock control systems which VizAbility has provided. We have the right stock at the right time.+ACI-
VizAbility has also allowed Perkins Power to produce accurate projections of demand to suppliers. +ACI-We can provide a 12 month rolling forecast by part number, which in turn helps suppliers with their planning,+ACI- says Deppe.
In the near future Perkins Power is also looking to web-enable the ordering process. +ACI-This will be based upon VizAbility`s back office functions and e-commerce capabilities, and its high interfacing flexibility will be of great value in this regard,+ACI- he concludes.
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Ability Corporation
Ability Corporation, a subsidiary company of Ixchange, is the leading provider of eCommerce fulfilment and inventory optimisation solutions to the supply chain. The Company prides itself on delivering rapid ROI and targeted solutions that address the dynamic needs of customers in the New Economy.
Ability Corporation`s suite of flexible, scaleable and robust supply chain solutions is built for the Internet economy. These solutions are developed on the Microsoft platform.
Ability Corporation has offices in the US, UK, Australia, New Zealand and South Africa. Additional information can be obtained by contacting the Company via the Internet at http://www.abilitycorp.com or at 11-808-6155.
VizAbility
VizAbility is designed for organizations that have to optimise their inventory investments. By providing the ability to plan demand and set strategic inventory goals it allows companies to both reduce inventory holdings and increase service levels. Using dynamic neural network technology, VizAbility is a focused solution that enables you to drive your business strategy into each and every fulfilment decision.