Replenishment is a Competitive Weapon

«Globally we engage with 400 companies actively using replenishment as a competitive weapon,» say Dan Craddock and Greg White. In their opinion replenishment should be a strategic element at the corporate level.
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Craddock and White were part almost from the very start of E3 Corporation, later acquired by JDA Software. The replenishment solutions from E3 back in time set a global standard, often known as «The Seven Steps of Buying». They now develop and market their own replenishment solutions based on the same principles as well as working with E3 users world-wide. They are also partners with Inventory Investment in the Nordics to spread the replenishment message to American and European companies. White is an acknowledged expert on optimized buying and design of best-of-breed software solutions within replenishment. Solutions based on the Seven Steps of Buying have always focused on buying, while ERP systems generally have paid less attention to the challenges in this area.

Increased profitability

4-5 years ago Craddock and White intensified their efforts on the buying profession. «In the years since, we have worked with more than 100 buying teams and continue to see them solidly strengthening the profitability of their companies. Often these teams manage replenishment of billions of dollars, so even small improvements result in astounding improvement

Greater degrees of freedom

«We notice that several users of our solutions have improved their management practices in their buying organizations. Job titles have changed and the buyers have been given more responsibility and authority,» Craddock and White contend. The buying teams take part in the creation of value and communicate the effect of their actions directly to the management and to other departments. It is important to start up a dialogue so that more people within the company see the value of their efforts, which in fact affect everything from transportation and warehousing to category management, etc. This creates interaction between the other departments and the buying department, which further contributes to increased profitability in the company.

The Seven Steps of Buying – globally, the most wide-spread replenishment principles in use

From their days in E3 Corporation Craddock and White took part in setting a global standard for optimized buying, namely «The Seven Steps of Buying». Even though some ERP suppliers deliver some functionality within this area, it cannot be compared to the scope of this replenishment methodology, Craddock and White contend.

Not been affected negatively by the financial downturn

«The financial downturn has so far had a positive impact on our business. Most companies struggle to have inventory levels appropriate to today’s demand. In most cases it is too big and leads to high costs,» say Craddock and White. After realizing this situation, companies want to address the issue. In the past most tended to turn to the sales operation of the companies, because the management often comes from the sales side and not so often from the buying side of the organizations. But nowadays more attention is given to the buying function. The ones that actively use buying competence as a means of improving the bottom line become winners. One of the core areas of improved profits at wholesalers and retailers is optimized buying and replenishment.

Strong expansion

The Seven Steps of Buying principles for optimized replenishment are widely spread in Europe and have also been implemented in a vast number of American companies. The European companies seem to be more adept at selecting buying personnel while the Americans seem to be more effective in implementing all the steps in the process simultaneously. European companies seem to have better access to personnel with high formal education.

News sharing

Craddock is presenting a global buyer forum – BuyerCampus.com, «It is our way of bringing all buyers together globally. Buying does not get the attention it deserves in many companies. We have thousands of buyers who globally receive the weekly newsletter from us. In this forum the buyers can find tips and ideas as well as case studies from other companies,» he concludes.

THIS IS A SPECIAL EDITION OF AN ARTICLE PUBLISHED IN THE NORWEGIAN MAGAZINE LOGISTIKK & LEDELSE NR. 9-2009

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Sverre Rosmo

Sverre Rosmo

Sverre har jobbet med forsyningskjeder, transport og innkjøp i over 20 år. De siste 10 årene har Sverre jobbet som prosjektleder, konsulent og i salgsrettet virksomhet hovedsaklig mot nordiske grossister, distributører og detaljister. Sverre brenner for logistikkfaget og ikke minst innkjøps- og lagerstyring. Han har i lengre tid vært engasjert som foredragsholder på Handelshøyskolen BI og Logistikkhøyskolen. Han har tidligere publisert fagartikler. Sverre er i dag medlem i styret i LOGMA.

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