Recently, GAINS Co-founder Bill Benton sat down for a discussion on “Real-life strategies to optimize inventory deployment” with two of GAINS’ customers, Sr. Director of Supply Chain Andrew Kurpiel of AmerCareRoyal and Paul Benhamou, Director of Supply Chain from Benco Dental. Their discussion took place during a webinar hosted by Supply Chain Brief, the video of their entire conversation is available here. However, we thought we’d call out some of the highlights of their remarks and advice about inventory challenges below. We hope you can learn something new and enjoy their talk as much as we did.
Managing Inventory Policies in Troubled Times
The last several years have challenged even the most seasoned supply chain veterans, but how have these pros managed these turbulent times?
AmerCareRoyal implemented GAINS in the middle of the pandemic. Their initial goal when bringing in GAINS was to focus on the segmentation and rationalization of SKUs, but they quickly moved to focus on calculating risk. Which items would become scarce, which would be delayed, where should they add more safety stock, and what items would be subject to inflation? AmerCareRoyal used GAINS to determine the best place to add safety stock to weather the storm without overpaying.
Having been an established GAINS customer when the pandemic began, Benco Dental used the GAINS platform to help manage its global demand. Benco began modeling different scenarios on a weekly and sometimes daily basis to take the guesswork out of the ordering process due to all the volatility they saw in the market. After five months, much of the demand returned to normal other than their PPE or Personal Protective Equipment business, which experienced higher demand than ever.
The bullwhip in demand for PPE (high demand, low global supply, new sellers cropping up to “meet demand” creating a further shortage of goods, a drop in demand, and eventually a giant surplus) at Benco Dental meant the company had to “get creative with their options” seeking alternative suppliers, applying discounts, and making donations trying to “turn their excess inventory back into cash.”
AmerCareRoyal also found itself turning to discounting as a strategy to alleviate some of their excess inventory from their commercial restaurant business as the pandemic forced restaurants to close their dining rooms. However, AmerCareRoyal saw a boom in their take-out product business as the world was ordering Door Dash. While overall the boost in sales from the carry-out related products was positive from a sales perspective in terms of lessening the impact of the shutdown it was difficult for the planning teams to determine accurate forecasts without effort.
The Role of GAINS and Automation in Addressing Inventory Challenges
Paul from Benco Dental shared that relying on GAINS is how they weather most of their inventory challenges, as that is what it was made to do. The purchasing and supply chain team spend half their time working in GAINS. Benco uses GAINS to:
- Set priorities
- Set Target Service levels
- Create demand cases
- Identifying challenges
- Discover outliers
- Focus on the items that most need their attention
- Create custom reports
The Benco team uses the automation capabilities in GAINS to send a monthly forecast report to their vendor partners, giving them visibility into the team’s needs. This helps the vendors to better prepare for the month ahead, ensuring that they can meet the needs of the Benco team and reduce the chance of stockouts.
Andrew and his team at AmerCareRoyal primarily used spreadsheet planning before moving to GAINS. They shared that one result of using automation is how much happier the planners seem to be now that they are relieved of the more manual tasks that come with spreadsheet planning. The shift away from manual tasks has allowed the AmerCareRoyal team to spend more time problem-solving. In the past, planners lacked the time necessary totrack and analyze delays with specific vendors and how it will affect the supply plan. Now planners can pivot, identify different supply routes or expedite orders covering gaps in supply and maintain service levels.
Inventory Insights Using Key Performance Indicators
For AmerCareRoyal there is a focus on forecast accuracy and bias are critical KPIs, as well as keeping a close eye on fill rates. Inventory and Inventory turns are another important metric Andrew Kurpiel shared that since there are so many metrics to track that it is important not to lose sight of those that matter most and for AmerCareRoyal those boil down to:
- Service levels
Paul Benhamou feels that there is no shortage of metrics to review in supply chain, he feels that Inventory turn and fill rate will tell you a lot about the health of your business. Looking at KPIs for Benco Dental’s vendor partners is another strategy he has found helpful. Reviewing vendors overdue PO’s has been helpful for determining which vendors may need the most attention or “hand-holding to meet their demand. They have found that they have been able to recover a lot of money from vendor partners who failed to deliver on items causing Benco to ship from alternative locations such as other Benco distribution centers.
To learn more about how GAINS can help you to optimize your supply chain and help you tackle the most complex inventory challenges please visit our website www.gainsystems.com.
AmerCare Royal: A single stream resource for over 6,000 disposable products used in the food service, janitorial, sanitation, industrial, hospitality, and medical industries. www.amercareroyal.com
Benco Dental: A full-service dental distributor working to simplify dentistry’s needs and offering a variety of supplies and equipment, providing dental practices with services such as marketing, support, consulting, financial and more. www.benco.com
GAINSystems: The GAINS Supply Chain Performance Optimization Platform helps businesses large and small Move Forward Faster with greater agility, resilience, confidence, and sustainability. The GAINS AI-driven cloud platform delivers continuous cost and profit optimization via machine learning, proven algorithms, and actionable analytics for global manufacturing, distribution, retail, and service parts/maintenance operations. www.GAINSystems.com
Supply Chain Brief brings together the best content for supply chain and logistic professionals from the widest variety of industry thought leaders. It is a combined effort of the Logistics and Supply Chain Management Society and Aggregage. www.supplychainbrief.com