Reynolds Company

The Reynolds Company (TRC) of Dallas, Texas strives to be a leading edge distributor by supplying the highest quality products and superior service. As a highly innovative distributor, TRC offers their entire electrical inventory to their customers online. This warehouse offering includes over 18,000 SKUs, 45,000 items in their product file, and over 650,000 items in their catalog file.

The Solution
To better manage this volume of products, TRC installed the Infor Distribution Essentials Logistic solution in November 2000, and estimates it has saved $330,000 in the first six months of use.

Reynolds saved $330,000 in the first six months of product use

Receiving
In Receiving, TRC made improvements from the moment material is scanned at the receiving dock, to the time it is placed on the shelf using Distribution Essentials Logistics solution. The amount of time required to update their quantity on hand as available product has reduced from an average of 4 hours, down to 30 minutes from time of receipt. The number of PO corrections made by purchasing has been reduced by 65%. The software allows TRC to perform many activities during the receiving process: receipt entry automation, barcode labeling of inbound material, correcting mismarked material, PO corrections and the ability to conduct root cause analysis. In PO corrections alone, TRC saved over $28,000 in the first six months on the new software. All of the abilities within receiving in the logistics solution help to improve the primary goal of delivering the right product to the customer, at the right time.

Inventory Control
The Inventory Control (IC) group within TRC incurred the most change with the new software. Prior to the new software installation, Inventory Control was assigned the task of finding material that was misplaced in the warehouse. As a result, IC could not effectively research discrepancies and would search trucks and make adjustments in the system. IC now has the information it needs to efficiently research inventory discrepancies. Moreover, TRC has been able to use this information to improve their back office processes. In addition, the IC team is responsible for TRC's cycle count program. TRC adopted a two-fold cycle count program. First, a traditional cycle count program classifies products as A,B,C,D items and the standard 4,3,2,1 count per year. Second is a bay count program that involves counting every item within a location and determining if all of the items within the bin are supposed to be there. TRC is finding and correcting material that was not counted at inventory and correcting material that had been misplaced. The result is the elimination of annual physicals and the increase of accuracy given by perpetual inventory control.

Shipping
Several areas within TRC's have noticed dramatic improvement in shipping process, service levels, while increasing picking and delivery accuracy. The most significant area of improvement is in the Warehouse Service Level. TRC calculates a Warehouse Service Level by the lines and quantity requested to ship, against the actual lines and quantity shipped. Historically, sales would have quantity to sell, but the warehouse would not be able to find the entire available quantity in the warehouse.

Before the Infor Distribution Essentials Logistic solution the shipping department was averaging 95.3% service level during the picking process. Inventory Control was tasked to find any material not found by shipping. Inventory Control found an average of 47% of the material not found by the shipping department, increasing the total warehouse service level to 97.5%. In the first thirty days on the new software, the shipping department achieved the following accuracy levels:

• week one 97.44%
• week two 97.98%
• week three 98.63%
• week four 98.58%

The shipping department went from an average service level of 95.3% to 98.15%, a net gain of 2.85% in the first 30 days. Inventory Control no longer spends its time searching for missing product, but researches why product is missing as well as performs the cycle count program. Shipping has seen savings of $333,000 with the Logistics solution from the Distribution Essentials team at Infor and is currently averaging greater than a 99% customer service level. Before implementing the software, it was discovered that an increase in sales volume had a severe impact in the warehouse service levels.

For every 10 percent increase in volume, TRC had a 1 percent decrease in the warehouse service level. The decrease in service level affected the total volume, not just the increased volume. A break down of this would mean that if 1,000 lines were picked with a warehouse service level of 97% then 30 lines were not picked complete. An increase to 1,100 lines would result in a drop to 96% warehouse service level with 44 lines not picked complete. With the new logistics software in place, TRC has experienced volumes as high as 150% with no impact to warehouse service level. Before, when a customer reported a misshipment, TRC had no other choice but to give the customer the benefit of the doubt. With the new software, not only have the customer calls decreased by 75%, but now TRC has the ability to track the order back to the exact location from which the product was pulled and to perform counts on material real time to determine if the inventory count is correct. If the inventory is over by the quantity reported by the customer, then TRC concedes the mistake. If the inventory is on (this is the case 67% of the time) the issue is given to sales to make a decision on how they want to address the customers' request.

The result is elimination of annual physicals and increased accuracy from perpetual inventory control.

With the new logistics software in place, TRC experienced volumes as high as 150% with no impact to warehouse service level.

Receiving has shown a 65% reduction in errors.

Summary
The Reynolds Company has seen improvements in all aspects of warehouse operations with the Infor Distribution Essentials Logistics solution. They have also seen a dramatic improvement in the use of their ERP package as their business system. Receiving has shown a 65% reduction in errors with the use of the new software. Shipping has improved an outstanding 89% since implementation. The first six months on the software has paid back The Reynolds Company over $350,000 in soft money. All of these benefits were achieved with a 13% reduction in operational personnel, elimination of annual physicals, and more importantly, an increase in customer satisfaction.

For more information about Infor Distribution Essentials offerings, contact us today: Infor 5555 Tech Center Drive #300 Colorado Springs, CO 80919 1.800.404.8009x4507 | 719.264.4507