You don't have to be a large corporation with tens of thousands of suppliers to benefit from supply chain visibility. Just ask Carlos Rubio, director of finance and operations for Grayling Industries, an Alpharetta, Ga.-based manufacturer of industrial liners and asbestos-abatement products, which has around 200 employees.
Faced with the challenge of having to produce in long runs to keep its largest plastics supplier happy, Grayling's liner business created a vendor-managed inventory system. However, Grayling lacked real-time visibility into those runs, according to Rubio. "We buy probably 50 to 60 different plastics, and as we were consuming it, we weren't able to track it," Rubio says. "And it just became very difficult to manage that inventory."
Rubio's solution was to use Grayling's freight provider as a 3PL (the provider has a warehouse in El Paso, Texas, not far from Grayling's plant in Jurez, Mexico), and to use Web-based software from San Francisco-based SmartTurn to manage the inventory.
"Then we went to our supplier and said, 'How about if we keep that inventory here in El Paso, we'll pay the freight, we'll keep two months' [of inventory] here and I can see it anywhere in the world.'"
Carlos Rubio estimates that his company has saved $500,000 this year alone by using SmartTurn software to match inventory to demand.
"My 3PL was happy, because she got into the inventory business. My supplier was ecstatic because he was getting long runs. And we loved it, because we had inventory on consignment, 75-day payment terms with a 1% discount."
Before Grayling started using the SmartTurn software, Rubio notes "there were times when we would run out of [plastic] rolls" due to communication breakdowns between the 3PL and the vendor. Or Grayling would place an order for a certain type of roll, "and the third party said, 'You know what? We can't find these rolls.' It was just amazing."
"And it would stop our production lines, and [the vendor] had to do a rush order, and it was just so expensive for all of us across the board," Rubio says.
With the software, Rubio now has real-time visibility into his minimum and maximum inventory levels.
"If it's getting close to the 'min,' it gives us that time to make sure we get a purchase order in so our vendor can put it into production and make it a very smooth transition."
By enabling Rubio to match his inventory to demand rather than just "buy a whole bunch of inventory," he estimates that Grayling has saved an additional $500,000 this year.
"That's an excellent ROI," Rubio says.