A Small But Mighty Success Story

Dec. 10, 2009
Grayling Industries used software to match inventory to demand and saved $100,000.

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.

Through an initial investment of "probably $1,000" in the SmartTurn software, Grayling saved $300,000 off the bat by negotiating favorable payment terms with its plastics supplier, according to Rubio.

"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.

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About the Author

Josh Cable | Former Senior Editor

Former Senior Editor Josh Cable covered innovation issues -- including trends and best practices in R&D, process improvement and product development. He also reported on the best practices of the most successful companies and executives in the world of transportation manufacturing, which encompasses the aerospace, automotive, rail and shipbuilding sectors. 

Josh also led the IndustryWeek Manufacturing Hall of Fame, IW’s annual tribute to the most influential executives and thought leaders in U.S. manufacturing history.

Before joining IndustryWeek, Josh was the editor-in-chief of Penton Media’s Government Product News and Government Procurement. He also was an award-winning beat reporter for several small newspapers in Northeast Ohio.

Josh received his BFA in creative writing from Bowling Green University, and continued his professional development through course-work at Ohio University and Cuyahoga Community College.

A lifelong resident of the Buckeye State, Josh currently lives in the Tremont neighborhood of Cleveland. When the weather cooperates, you’ll find him riding his bike to work, exercising his green thumb in the backyard or playing ultimate Frisbee.  

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