Technologies Of The Year -- SeeChain Consignment Inventory

Jan. 14, 2005
SeeCommerce Inc.'s Web-based offering helps manufacturers keep their off-site inventory under control.

Maintaining appropriate inventory levels has always given manufacturers fits. They wage war against carrying too much costly product with tools such as lean manufacturing, which aspires to keep inventory at minimal levels, while at the same time fighting the urge to maintain a healthy safety stock to address any eventuality. Get it wrong and you face either writing off excess inventory or coping with material shortages. Today the inventory dilemma is only magnified by the growing trend of outsourcing -- and with it, consigned inventory. Locating inventory at off-site locations, either with suppliers or contract manufacturers, adds yet another layer of complexity to the inventory dilemma. Palo Alto, Calif.-based technology firm SeeCommerce Inc. believes it has developed a solution to help companies better manage the consigned inventory equation. Its SeeChain 5.0 Consignment Inventory module allows manufacturers to address off-site inventory "as though it were stored within their own manufacturing facilities and warehouses, and keep track of this stock within their existing inventory-control process." In short, the technology improves visibility into consigned inventory. It works by regularly gathering data from both the manufacturer's and its suppliers' or custom manufacturers' operational systems, which are then correlated and compared against predefined performance thresholds for consigned inventory. If those thresholds are breached, the SeeChain consignment inventory module sends an alert to the manufacturer that contains links to root cause data. With this information, inventory managers can quickly address either impending overstocks or shortage conditions. Parviz Hooman, SeeCommerce vice president of research and development, says manufacturers gain daily visibility to each contractor, each supplier and all consigned inventory. "So there's no misunderstanding or any confusion as far as who has what and who's using what," he says. The Web-based offering is unique in a variety of ways, says Hooman, but its collaborative aspect may be among the most notable. "That is something that typically has been a harder problem to solve by software vendors . . . going across organizational firewalls to get everybody involved and collaborate around a problem," Hooman says. One company employing the consignment inventory module is DaimlerChrysler Corp.'s Mopar Parts Group, the primary distributor of parts and accessories for all Chrysler, Dodge and Jeep dealerships worldwide. SeeCommerce partnered with Mopar to develop the key performance indicators for the consignment inventory product. SeeCommerce says Mopar provided valuable insights into the operational challenges associated with managing consigned-inventory supplier relationships. How well has the new application performed? In six months, the inventory module has helped Mopar improve its consigned inventory record accuracy from about 42% to 95% at some 19 supplier locations. The software product targets the high-tech and automotive industries.

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