Elkay has successfully implemented its first Vendor Managed Inventory program for water cooler and fountain products in a pilot program initiated with Indianapolis-based wholesaler Central Supply.
The program incorporates an EDI-based exchange of sales, inventory and order replenishment information.
“The VMI implementation with Elkay was seamless and we are already experiencing success,” Gene Burt, president of Central Supply, said in a statement. For one product line, inventory levels were reduced by 43%, turns increased from 3.5 to 11.5, and gross margin return on investment rose from 72 to 180, he said.
Also, the VMI program has reduced overstock and eliminated the labor normally associated with tracking inventories by the wholesaler's purchasing department, Burt said.
“By having the right combination of inventory on-hand, our customers are able to increase sales, reduce inventory carrying costs and cut supply chain management costs,” Jack Krecek, vice president/general manager, Water Cooler Products, Elkay division, said in a statement.
Based on the success of this program, Elkay plans to explore additional VMI opportunities with other customers.