ACTYLUS™ SMART BINS– A COMPLETE SOLUTION TO STOCK-OUTS
In some environments, stock-outs caused by inefficient third party inventory management can be more than a headache – they can lead to contractual penalties for distributors that reach hundreds to thousands of pounds.
This is especially the case in complex industries with high overhead and labour, such as pharmaceutical and aerospace manufacturing. Distributors in these industries may be subject to severe fines if stock-outs delay production. Beyond the fines, the contracts themselves may even be put into peril.
Even without the prospect of financial penalties, lack of availability of a key fastener when it is needed is, at best, a major irritant for customers. At worst, fastener stock-outs make it even tougher to adhere to already pressured production schedules. All of this creates an extra layer of pressure on distributors to find ways to guarantee stock is available when and where it is needed.
Traditional Bins: Stuck in the Past
In many high-tech manufacturing facilities, there is likely to be a traditional “dumb” bin arrangement for the storage of fasteners and similar products. When compared with the rest of the facility, this approach feels out of place and dated - especially as these bins, arranged in rows stacked on top of each other, hold all the vital parts and supplies that keep the business moving.
While the supply chains for these companies have become more modern and advanced, bins are often stuck in the past. Most bin arrangements offer no visibility into the flow of materials at any given moment. This can lead to a cascading series of issues, which can severely impact the bottom line.
Employees are well aware the bin system does not work well, so to deal with the issue of out-of-stock parts, they end up taking more items than they really need. By stockpiling items, they know they can do their jobs without interruption. However, they are also compounding the original problem, creating stock-outs for other employees, thereby interfering with overall facility productivity.
Typically, distributors make two visits to complete what is in effect a single task – one visit to count what is in each bin, and another, several days later, to act on that information and restock.
In the meantime, on-site management deals with the stock-outs, either by placing costly emergency orders, or sending employees on “milk runs” for supplies from a local supplier down the street. Either way, they probably end up paying a price premium per unit. Meanwhile, many managers choose to overspend on inventory to keep a backup supply of emergency stock on hand in the building.
On all of these levels and more, the traditional bin arrangement is failing today’s business world. Bins represent an old, manual process, while the rest of the world is moving to real-time supply chain visibility and just-in-time delivery.
One company’s approach
Assembly Fasteners, Inc. (AFI), a global distributor of products and services to very large industrial customers, was operating with many of these problems with bin systems located at customer facilities. AFI specialises in vendor-managed inventory (VMI) programmes, within which it manages its customers’ project inventory levels.
For AFI and its customers, the old method of re-stocking bins was time-consuming and did not represent best practice.
For example, to service one account which had 200 part numbers, AFI would send a technician to the customer facility to manually check every single bin in the array with a scanner to determine what to order for restocking.The information gleaned would then be uploaded to the customer’s internal systems to produce an order. The AFI team would then have to make a return visit to restock the bins.
Seeking a new way of doing things, AFI began looking at automated bin systems, but ruled most of them out for being cumbersome or too difficult to use.
However, immediately upon seeing ACTYLUS™ Smart Bins from Apex Supply Chain Technologies, AFI president Hugh Watson grew excited.
“We could tell from the outset that this would be a game-changer for us,” Watson said.
The ACTYLUS Smart Bin System
AFI deployed ACTYLUS Smart Bins with two contract manufacturing customers, which were operating from facilities in excess of 9,000m2. Able to detect stock levels by the weight of product in each compartment, ACTYLUS automatically sends current inventory levels for each bin to the Apex Trajectory Cloud™ platform.
Trajectory then alerts AFI and its customers when those levels drop to pre-set minimums. Trajectory reports are viewable anytime and anywhere on smart phones, tablets and computers. This real-time visibility into inventory levels eliminated at a stroke the need for counting trips, safety stock and emergency restocking.
Kent Savage, founder and CEO of Apex Supply Chain Technologies, explained: “The trend in business and industry is to modernise every aspect of the supply chain to drive as much waste as possible out of the system. Because of that, smart bins have incredible promise. By eliminating all of the manual effort that was needed to keep the old bin systems working, employers can keep their labour force focused on more important work, generating higher productivity and greater profitability.”
Multiple configurations in the number of rows and size of the bins are available, so ACTYLUS can be customised for any setting. The clean, LED-lit bins create a solid first impression.
Immediate Savings
After AFI installed the ACTYLUS system, the company realised immediate savings in time and inventory costs.
“We don’t lose time scanning bins anymore,” Watson said. “Now we get alerts by email, place our orders for replacement parts and make one trip to replenish the bins.”
Technicians who used to spend so much time on manual counts immediately regained a full day each week because ACTYLUS checks each bin for them. Projected over an entire year, they are saving more than two months of time that can now be spent on more productive tasks.
“Once the companies, which are using old bins, sit down and start doing the math, they start to realise the level of labour savings achievable by moving to smart bin technology,” Savage said.
Eliminating Safety Stock
With Trajectory Cloud automatically notifying AFI to reorder when inventory levels reach pre-set minimums, there is no concern about stock-outs, so safety stock is no longer necessary. AFI pulled back on the levels of inventory that it placed in the bins on consignment.
“After we installed ACTYLUS it was like money was falling from the sky, because we were able to pull back an incredible amount of inventory,” Watson said.
A quality control manager even wrote up the ACTYLUS system for ISO continuous quality improvement at one facility.
“At the same time, you’re providing a solution that really has strong visual appeal,” Watson said. “It replaces dirty, mismatched old steel shelves with a clean, well-lit system. When people see it, they talk about how they want to move more of our products into the ACTYLUS Smart Bins, which helps us to expand our partnership with those customers.”
Immediate Growth
One site had a rack of masking products adjacent to its new ACTYLUS bins, and immediately gave that business to AFI so it could expand its use of ACTYLUS.
“They began asking how soon they could get more ACTYLUS racks installed, so it’s quickly increasing the amount of inventory we’re providing to that customer,” Watson said.
In other situations, customers who see they are not using every available bin in their ACTYLUS system are ordering new SKUs from AFI so they can fill every bin.
Brand Differentiator
Watson says the ACTYLUS solution has become a major advantage for AFI.
“We work in a competitive industry, so the Apex ACTYLUS system gives us a different look and appeal. People stop to look at this when it’s installed. It helps us to separate ourselves from competitors that are often right next to us on the shop floor.”
For more information about Apex Supply Chain Technologies, please visit www.ApexSupplyChain.com/gb, call 0800 840 4776 or email info.eu@apexsupplychain.com.
