GAINS Increases Customer Service & Profit for O’Neal Flat Rolled Metals
O’Neal Flat Rolled Metals had two major challenges:
1. Keeping Customer Service Levels High in order to differentiate it from the competition
2. Avoiding the Costs of Excess Inventories and Expediting
“In a service-driven industry, O’Neal Flat Rolled Metals realised that our most important goal and our most highly prized differentiator is our customer service level. If we can offer a higher level of customer service than our competitors, we will increase our business,” stated O’Neal Flat Rolled Metals’ President. “A system was needed to monitor and dynamically manage the company’s customer service levels and their associated costs. The system O’Neal Flat Rolled Metals chose was GAINS (General Adaptive INventory Solutions) from GAINSystems. GAINS actually paid for itself before we even implemented based on the savings generated from the GAINSystems’ proof of concept, the IIPSE (Inventory Investment Profit and Service Evaluation).” GAINS’ unique and proprietary ability to dynamically monitor and analyse every SKU (item) at every Location (SKUL) in the enterprise, is one of the principle reasons why O’Neal Flat Rolled Metals was able to quickly document service level and financial improvements. Another reason is the depth of knowledge GAINSystems consultants had regarding the metals industry.
Through the use of exception codes and real-time demand and supply analysis, GAINS quickly identifies SKUs, orders, work tickets, etc. that need special attention. GAINS evaluates the issue identified and then provides O’Neal Flat Rolled Metals’ professional buyers and planners an exception report that includes suggested resolutions and actions. Based on GAINS accuracy and dynamic monitoring, O’Neal has also been able to dramatically improve productivity.
Several of the other unique optimisation and inventory planning capabilities found in GAINS, that enabled O’Neal Flat Rolled Metals to achieve their results, are:
1. Keeping Customer Service Levels High in order to differentiate it from the competition
2. Avoiding the Costs of Excess Inventories and Expediting
“In a service-driven industry, O’Neal Flat Rolled Metals realised that our most important goal and our most highly prized differentiator is our customer service level. If we can offer a higher level of customer service than our competitors, we will increase our business,” stated O’Neal Flat Rolled Metals’ President. “A system was needed to monitor and dynamically manage the company’s customer service levels and their associated costs. The system O’Neal Flat Rolled Metals chose was GAINS (General Adaptive INventory Solutions) from GAINSystems. GAINS actually paid for itself before we even implemented based on the savings generated from the GAINSystems’ proof of concept, the IIPSE (Inventory Investment Profit and Service Evaluation).” GAINS’ unique and proprietary ability to dynamically monitor and analyse every SKU (item) at every Location (SKUL) in the enterprise, is one of the principle reasons why O’Neal Flat Rolled Metals was able to quickly document service level and financial improvements. Another reason is the depth of knowledge GAINSystems consultants had regarding the metals industry.
Through the use of exception codes and real-time demand and supply analysis, GAINS quickly identifies SKUs, orders, work tickets, etc. that need special attention. GAINS evaluates the issue identified and then provides O’Neal Flat Rolled Metals’ professional buyers and planners an exception report that includes suggested resolutions and actions. Based on GAINS accuracy and dynamic monitoring, O’Neal has also been able to dramatically improve productivity.
Several of the other unique optimisation and inventory planning capabilities found in GAINS, that enabled O’Neal Flat Rolled Metals to achieve their results, are:
- Dynamic Forecast Model Selection that tests for plausibility and accuracy across 35 models to provide an objective demand plan that minimises bias and error. GAINS models are able to forecast all demand patterns including sporadic and lumpy usage. Macro-economic leading indicators can also be incorporated to ensure forecasts and plans are not just a “look in the rear view mirror.”
- Integration of Supplier Rolling Schedules and Customer Forecasts allow GAINS to make precise recommendations with respect to supply availability and customer requirements based on contracts.
- Inventory Policy Optimisation algorithms that precisely achieve targeted service levels by comprehensively managing sources of planning error. These include: demand plan/forecast error, lead-time variation, supply yield, and optimal ordering cycles.
- Service Level Optimisation algorithms that automatically determine service levels uniquely for each item to achieve an aggregate target while minimising or maximising a business objective, (e.g. minimized total cost, minimum inventory, specific inventory turns target, maximum profit, etc.)
- Multi-Echelon Inventory Optimisation (MEIO) algorithms that determine whether or not to stock an item and at what service level. These solve for interdependencies among locations and/or within the bill-of-material (BOM) to devise postponement strategies and address customer expectations to minimise cost or maximise profit.
- Automated and Optimised Replenishment Planning that determines the profit and service level optimum source for each replenishment (parent location, primary vendor, surplus location, alternate vendor, substitute, etc.). Purchase constraints and opportunities (e.g. bulk buy discounts or rebates) are dynamically analysed in the generation of specific orders to meet or fulfill these parameters at least total annual cost given targeted customer service levels.
“GAINS allowed O’Neal Flat Rolled Metals to realise an immediate payback after our 10 week implementation. In our first month of operation, we were able to reduce purchasing, planning, and handling costs. Shortly thereafter we were able to reduce our inventory investment by 25% as we drove our customer service levels up 15% resulting in a 4-5% increase in revenues.” – Senior Vice President of Procurement, O’Neal Flat Rolled Metals