Fastener Distributor Gains Massive Benefits From ERP Supply Chain System And Vendor Managed Inventory

With the help of K3 Business Technology's MFW Enterprise Resource Planning system Wesco Aircraft has reduced its inventory levels by 70%, increased on-time delivery performance from 85% to nearly 99% and developed an efficient web-based supply chain system.

Wesco Aircraft is based in Huddersfield and supplies fasteners to the aerospace industry. The company was formed in 1984 to distribute products to US aerospace standards from major fastener manufacturers, and since then the business has grown rapidly by developing a 'service provision' capability. This evolved from research into providing customers with extra services to manage the products to point-of-use and to help them decrease downtime and increase productivity.

'Service provision' is a result of major changes in manufacturing processes over the last decade or so. Cost cutting activities through Just-in-Time and lean manufacturing techniques started in the auto industry and soon moved to the aerospace sector. It has meant that direct line feed (DLF) has become the norm in the supply of high volume, low cost materials such as fasteners. DLF entails getting the correct materials to the production line operator exactly when they are needed. To achieve this at minimum cost and without unnecessary stock is complex and relies on an efficient supply chain management system. The system details part numbers, determines minimum stock levels, analyses usage, flags when replacement stock is needed and so on.

Operations Director Matt Greaves comments: "Our customer research pointed the way forward and we developed a local DLF system to service GKN Westland on the Isle of Wight, and then expanded the service to other key customers. We now number the top aerospace companies in the world amongst our clients."

Wesco's pioneering work in the area of vendor-managed inventory (VMI) has resulted in rapid expansion. Turnover has risen from 2.5 million in 1997 to 12.6 million in 2001. It is now carrying out around 40,000 transactions a month, 30,000 of which are under DLF. It is also managing a supply chain consisting of 30 million of warehouse stock, of which 23 million is consigned from other suppliers. MFW enables Wesco to manage inventory from 115 different suppliers to support BAE Systems alone.

Efficient IT systems are needed to control and manage such complex VMI operations and was a key reason why Wesco upgraded to K3's latest MFW software. MFW is a 32 bit system comprising over 30 modules - which include materials, quality, financial and production management - that grow together to provide a fully integrated Windows-based ERP system.

K3 developed a special solution to provide Wesco with the capability for stock replenishment triggered by a lineside bar code scan from customers' remote locations. The transaction history is held within MFW and is available to all users .

"We've developed a web-based supply chain system with MFW that allows customers and suppliers to look at the exact stock position," explains Greaves. "It gives true visibility across the supply chain and provides paperless invoicing because delivery notes and other documents are scanned into the system. In terms of benefits, DLF systems using MFW have reduced inventory levels by 70% and increased on time delivery performance from 85% to 98.4%.

"We started supplying fasteners under DLF but this has expanded to bearings, fittings, electrical equipment and items bought-out-to-drawing. Across the business we are supporting 45,000 lineside bins which equates to around 25,000 individual line items - and these are all handled by MFW," adds Greaves.

"The fasteners business is extremely competitive and you can't just stay as an old- fashioned distributor anymore without losing massive amounts of turnover. We lead the aerospace market in the DLF area and have just won a BAE Systems Chairman's award for innovation."

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NOTES TO EDITORS:

K3 Business Technology Group plc is a public company listed on the AIM market of the London Stock Exchange. Formerly known as Kewill ERP, the company is one of the UK's leading authors and suppliers of Supply Chain Management and ERP software for the SME Sector. Products include IBS, SmartVision (ERP solutions), Omicron (financial software) and JobBOSS for small jobshops.

K3's clients in the UK include Rolls Royce, Thomson CSF, Lockheed Martin, Raytheon and Thales. With over 1650 current UK customers, the company is the UK's market leading supplier of UK-developed Supply Chain Management software to the SME sector.

FOR FURTHER INFORMATION CONTACT:

Richard Thomas               
K3 Business Technology Group plc         
Electra House                  
Electra Way                  
Crewe                     
Tel: 01270 211211               
E-mail: richard.thomas@k3btg.com                       
K3 can also be reached on its websites: www.lenamanufacturing.com and www.k3btg.com