Stryker Instruments Transforms Inventory Management Processes with VMI

Manufacturer uses TradeBeam software to reduce inventory levels, stock-out occurrences by enabling suppliers to proactively manage replenishment

Manufacturer uses TradeBeam software to reduce inventory levels, stock-out occurrences by enabling suppliers to proactively manage replenishment

San Mateo, CA — June 27, 2006 — Stryker Instruments has seen significant benefits from employing a vendor management inventory (VMI) solution from global trade management (GTM) specialist TradeBeam, reducing inventory levels and stock-out occurrences by enabling its supplier base to proactively manage the replenishment process.

Faced with the challenge of sharing real-time forecast and consumption rate data information with suppliers, Stryker suffered inflated inventory levels, stock-outs and a variety of time-consuming supply chain administrative issues and costs. The company wanted to give its U.S. and overseas suppliers a window into the division's data without administering a costly electronic date interchange (EDI) solution. The organization was looking for more efficient scheduling and replenishment processes, as well as a means of rating supplier performance.

Stryker found the solution needed to meet these business demands in the VMI application within TradeBeam's GTM suite, a tool that provides suppliers with real-time inventory consumption, forecast and shipping information. The application enables vendors to see the supply chain process from end-to-end while allowing them to use a Web browser to provide advanced shipping notice (ASN) and promise-to-ship information to their customers. Additionally, the solution uses active alerting technology to allow proactive event-based management of the direct material supply chain.

The system has helped Stryker reduce its direct material inventory by 30 percent. Just as important, its suppliers also have gained efficiencies. By having visibility of supply and demand activities for their components, suppliers are able to design more efficient manufacturing scheduling, replenishment and shipping processes. In some cases, suppliers have been able to reduce their component inventories by as much as 25 percent.

"We are leveraging information from Stryker that we never had before, and we are importing it directly into our production system," said John Macchia, president of Advance Turning & Manufacturing. "As a result, we have reduced our inventory levels, dramatically improving our production schedules for parts to Stryker Instruments. Thanks to TradeBeam, we now have complete visibility for our outgoing shipments."

Based on success with suppliers, Stryker has expanded the use of TradeBeam's solution, including using it to schedule the production process at its Kalamazoo, Mich., plant. The plant is also using the VMI application to replenish outbound finished good inventory in Stryker's U.K. and Japanese distribution centers, resulting in 30 percent less inventory for those products. Puerto Rico, Germany and Switzerland facilities also are using or deploying the system.

In addition to using TradeBeam's solution for replenishment and scheduling tasks, Stryker has found that it can use the system to help manage the company's financial performance. The application's what-if capabilities let managers understand what the best mix of production activity will be to meet customer service levels and the division's financial goals.

"The results of the implementation to date have been extremely impressive," said Mark Lincoln, director of manufacturing for Stryker Instruments. "We think TradeBeam is a perfect fit for our operation and have a goal to expand the solution to other divisions where we think it can become the standard for supply chain execution management."

Additional Articles of Interest

— Stryker Instruments achieved success in inventory optimization by taking a no-frills approach and relying on collaborative supplier relations. Read more in "Keeping Supply Chain Transformation Simple," the Best Practices case study in the April/May 2006 issue of Supply & Demand Chain Executive.

— Thinking about automating your warehousing operations? Take a strategic stance with this helpful guide: "The Analyst Corner: Warehouse Management," in the April/May 2006 issue of Supply & Demand Chain Executive.