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GAINS Australia Inventory Management

GAINS Increases McNaughton-McKay’s Turns, Fill Rates, and Profits by Optimising Inventory

The Electrical Equipment Distribution market is highly competitive and very dynamic. Not only do customers change orders and items on a frequent,
often random basis, but the market itself is subject to violent gyrations due to weather, interest rates, and other macro-economic factors. 

“To deal with such an environment, McNaughton-McKay had long sought the ability to accurately forecast, then dynamically monitor and adjust forecasts, in real time, so that they could ensure targeted customer service levels match the ever changing demand signals of our customers,” states Bob Kuntzman, Corporate Inventory Manager. “Implementing GAINSystems’ profit driven inventory optimisation solution, GAINS (General Adaptive INventory Solution), has given us that ability,” McNaughton-McKay operates in 24 locations throughout the Eastern United States and Germany. They service over 6,000 customers and carry over 75,000 products which are supplied by over 250 vendors. McNaughton-McKay is listed as the 16th Largest Electrical Distributor in the United States.

“We first became familiar with GAINS because several other large electrical equipment distributors had already had great success using GAINS to optimise their inventories for improved profit and service level achievement,” states Kuntzman.

“Because of this, we decided to commence a GAINSystems’ IIPSE (Inventory Investment, Profit, and Service Evaluation) to assess our operational opportunity.”
“The financial results of the IIPSE were so compelling,” states Kuntzman, “that after careful validation of the IIPSE results, we decided to immediately install an enterprise license.”

Given the highly competitive nature of the Electrical Distribution business, McNaughton-McKay made the strategic decision, to target GAINS’ primary goal as one of optimising their business around increasing complete order fill rate and reducing inventory investment as their secondary goal.

The operational results speak for themselves:
  •  Inventory turns increased by 30%
  • 100% Order-Complete fill rates increased 50%
  • Revenues increased by 7%
  • Receiving activity dramatically reduced

“Because of our ability to increase our Fill Rates through the use of GAINS, we have simultaneously seen a measurable reduction in our back-orders, shipping costs, and handling costs.” – Scott Sellers VP Operations

“Because of GAINS’ ability to dynamically identify and manage total error, in real time, and then adjust policies and plans to meet targeted customer service levels accordingly, we have seen our inventory investment stay constant even as our Fill Rates and Sales increase – GAINS has definitely helped us reduce our inventory and safety stock!”  – Scott Sellers VP Operations

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