Elektro Internationaal - Worry-free Vendor Managed Inventory

Optimising internal logistics is often a challenge for panel builders, from grab stock management to getting a grip on delivery times. Especially when production is spread across multiple sites, like at Elektro Internationaal (EI) in Woerden. In 2016, the company already took a big step, together with itsme Connected Business, at their batch production site. This was related to the introduction of Vendor Managed Inventory (VMI) in the form of a 2BIN system. In the near future, EI expects to start the construction of new premises, whereby all activities will be brought under one roof. At that point, the logistics for the entire production will also be optimised.

Elektro Internationaal is one of the leading players in our country in the field of panel building and control technology. The company designs and builds distribution and control cabinets for a wide range of markets, from non-residential buildings, data centres and healthcare institutions to retail, chemicals and the pharmaceutical industry.

EI has 115 employees, including flexible deployment, and operates across four premises (in total, 4,500 m2) in Woerden. This is far from optimal for production and internal logistics in terms of efficiency. There are plans for a brand-new replacement building (in total, 6,000 m2). Provided all permits are granted this year, the new premises should be ready for use by early 2025.

Professionalised logistics

The organisation of the logistics in the new building will be handled by Ber de Vor. He joined the company on 1 August as Supply Chain Coordinator after graduating from the University of Applied Sciences Utrecht in logistics management at EI. “That was about internal logistics, but on the front end also about ordering methods and liaising with suppliers. I’m now looking at how we can optimise logistics processes. For as long as we still have several sites, there are ways to benefit in terms of internal transport. In that respect, I am looking forward to the new premises. I want to work out the layout of it as comprehensively as possible and will consult suppliers like itsme.” “For the existing situation, it’s also about optimisation,” explains Bart Ranke, Finance, Logistics and ICT Manager. “We have already professionalised our logistics processes to a reasonable extent. In 2016, at our biggest site for batch production, we opted for VMI in the form of a 2BIN system for gripping materials. As a panel builder, we mainly carry the Schneider Electric brand; we source most electrical components from them. For gripping materials such as wire and fasteners, we already have a long-term relationship with itsme. This has been strengthened even more with the implementation of the 2BIN system.”

“itsme was the most flexible party for materials supply.”

“VMI is one of the logistics concepts offered by itsme,” explains Dennis Hermans, Account Manager OEM at itsme. “We were able to demonstrate with a calculation of the total cost of ownership that it paid off to accommodate low-value materials for batch production in a VMI system. For EI, the big advantage of this is a completely worry-free solution for these products; it has led to a reduction in purchase orders and the number of accounts payable. In addition, downtime, which should certainly not happen in batch production, has been avoided with the VMI system managed by itsme.” At EI, the system in question was the 2BIN system, with two trays for each material. If one is empty, the customer uses the other, while itsme replenishes the stock in the empty tray. “EI opted for itsme as its VMI partner because of its flexibility,” explains Ranke. “We have preferences for certain materials we use in our cabinets and itsme was the most flexible party in terms of materials supply.

New technical challenge

“In the new building, EI plans to introduce VMI for the entire production, including for cabinet production in small quantities,” says Ranke. “We use different materials for that, so there will probably be several 2BIN setups in the new building, with different contents. That’s something Ber will look into.” It would allow EI to achieve even more logistical benefits. “The biggest efficiency boost is simply the fact that we are going from four buildings to one. We will save on staff, traffic and walking routes by no longer having to drive back and forth with materials and grab stocks when there is a shortage somewhere.” Hermans: “To us, the main win is that we can maintain continuity in the relationship with EI and continue to make a demonstrable contribution to their success. We have once again demonstrated the added value of itsme through an optimised VMI system.”

“In the new building, there will be several 2BIN setups.”

For now, EI has its work cut out on the logistics arrangements for the new building, which it hopes will be completed soon. “Nevertheless, we still have more aspirations,” says Ranke. “Control technology is now a side business for us, but we want to develop in that area. With the current scarcity in the labour market, it is great to be able to call on a partner like itsme, which has in-house specialists for programming components.” Hermans certainly welcomes this. “We will be able to serve EI even more at their new location with our logistics concepts and, in addition, will look at what else we can do for them in terms of control technology.”

No worries

This is what keeps the cooperation alive. “For the 2BIN system, it was smooth sailing right from the start,” says Ranke. “In the first few months, we had to fine-tune order quantities and item selection in close consultation. After that, the process was clear to all parties and it began to run like clockwork. It still does. Our site manager recently mentioned that communication is going well, for example about big upcoming projects, so that order quantities are increased in time. It’s just nice that we can go over things like this with someone from itsme on site, that there is interaction instead of arranging everything on a computer. We thought we would be able to pick it up ourselves, but it’s good that it has been placed in the hands of a party that is working on it on a daily basis and who can take away our worries.” “That is exactly what the system is for,” confirms Hermans. “Every week we visit to do a scan and replenish stocks; EI doesn’t have to worry about that. In the background, we also perform backorder monitoring on the 2BIN materials. Every week we run reports and if they contain items with a lead time above a certain deadline, we coordinate with EI. It’s all about taking the worry out of the equation.”

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