Every consumer is happy when a desired product is immediately available from their trusted retailer. A well-stocked warehouse is therefore a powerful customer loyalty tool for any retailer. However, warehousing is also a considerable cost factor: for example, the constant flow of goods requires a permanent reconciliation of sales, stock and reorders. This causes both administrative and personnel costs. In addition, stockpiled products sometimes tie up an unnecessary amount of capital, which is easiest to understand in the case of so-called slow-moving items.

"If you want to make your warehouse more efficient, there are two key points to start with," says Dennis Seeger from Purchasing at Elsinghorst: "Firstly, the management of stock and orders should be largely automated. Secondly, the total inventory must not simply be minimized, but above all adjusted in such a way that the desired availability is maintained." It is therefore very important to adapt the product portfolio and the individual product stocks precisely to the respective customer requirements.

Monitoring the inventory

With this goal in mind, Elsinghorst had already created its own warehouse management systems, including calculation options, but wanted to break new ground, according to Sebastian Brinks, data expert at Elsinghorst. "In view of the advances in information technology, we envisioned a more efficient solution that would monitor stock levels almost automatically, trigger the necessary orders automatically and also analyze the flow of goods."

This is exactly where SKF and the Vendor Managed Inventory came into play. The system, called VMI for short, is a digital inventory management tool that automates planning on the basis of jointly defined product range and service specifications. "It dynamically adapts inventory planning to the customer's ordering behaviour, thereby optimizing stock turnover and availability," explains Jürgen Schäfer from Distribution Development at the German SKF. "The VMI also reduces the dealer's administrative workload by, among other things, automatically initiating the necessary product reorders from SKF."

To install the VMI, Elsinghorst entered uncharted technological territory, as did the German SKF: there were no reference cases or experts in this country. "That was quite a challenge for a medium-sized company like us," recalls Seeger, "because we suddenly had to deal with IT specialists in Warsaw and logistics specialists from SKF's European distribution center in Tongeren, Belgium."