Issue link: http://read.dmtmag.com/i/101441
A Closer Look support parts operations/systems manager at Fabick CAT. It automates and prioritizes about 415-500 orders per day at Fabick, minimizing wait times for customers. Fabick uses the TECSYS system for picking, packing, put-back and cycle counting. Reduce Inventory and Improve Fill Rates Using a centralized warehouse management solution allows dealers to reduce inventory, while ensuring the right parts are in stock. The more locations you have in your system, the more money dealers can typically save, because branch locations tend to stock more than they need. ���Our system tracks inventory usage so we know what needs to be there,��� said Colosino. ���We reduce the inventory, but we better serve the customer.��� Because actual parts inventory is visible to the entire team and branch locations, fulfillment rates rise. According to Colosino, dealers using the TECSYS system have typically seen fill rates rise from approximately 80 percent to 98+ percent. Automated communication with manufacturers allows for rapid delivery of parts from the manufacturer (four hours), increasing fulfillment through a process called cross-docking. Customers who meet with Colosino often think they need more warehouse space but in most cases he argues against it. ���They don���t need more space, they just haven���t effectively managed their space,��� said Colosino. This is because in a traditional warehouse, items are typically stored in a set location, and rarely changed despite changes in usage, he says. In a ���smart��� warehouse, items can be placed wherever open slots are available. The system determines optimum product placement based on pick frequencies, facility layout and other product characteristics. ���In our solution, you can have one product in five different places. It doesn���t matter because the system knows where everything is,��� explained Colosino. Return on Investment Can most dealers afford a warehouse management system? Colosino asks, ���Can you afford not to have it?��� To demonstrate to equipment dealers just how much money they are losing through an inefficient, paperbased system, he asks dealers to track mistakes and the cost of those errors: primarily labor and shipping costs. For construction equipment dealers those costs range between $250-$500 for each mistake, he says. Most dealers are surprised at the cost of warehouse mistakes. By comparing the cost of their errors to the 99 percent accuracy rate for the new system, dealers are able to calculate their potential savings. ���Typically, recovering those costs alone will pay for a system within six months to a year-and-a-half,��� said Colosino. Colosino believes the warehouse management solution makes sense for construction equipment dealers with Self-Service Kiosk Reduces Wait Times Dealers know that long wait times at the parts counter don���t help customer satisfaction scores. That���s why when Milton CAT envisioned their new warehouse management system it included a self-service kiosk that would let their busy customers get in, get the parts they need, and get out, without waiting or interacting with staff. The ability of TECSYS to customize its system to meet this key requirement was one of the reasons why the Caterpillar dealer selected it. Similar to automated airport check-in, customers simply swipe their credit card to pull up the information about their orders. They then can retrieve their part in a specially assigned pick-up area. According to Colosino, the need for a kiosk is really determined by the amount of will-call a dealer has. At Fabick CAT the initial kiosk was met with skepticism, particularly from parts counter personnel. ���They thought no one would like it,��� said Pursley. That didn���t prove to be the case. ��� Now there are a lot of people using it, including our own warehouse people,��� added Pursley. more than a 20,000-square-foot warehouse and three or four people picking orders. The more store locations you have, the more likely it is that you are carrying too much inventory. Because of the wide variety and volume of products in a typical dealer warehouse, Colosino cautions dealers against investing in automated picking devices such as carousels ��� these devices take an order and deliver the product you want. The types of automation that do work well for dealers are sortation devices and conveyors that save steps for parts pickers. Dealers have the option of purchasing the system, hosting it on their own servers, or having TECSYS host it. Most dealers have opted to host it themselves. Dealers can purchase by user or opt for an enterprise license that is unlimited. To date, the enterprise license is most popular among dealers. In addition to the initial purchase price for the license, there is also an annual maintenance fee equal to 18 percent of the cost of the license. Implementation During the three- to 12-month implementation process, dealers should expect some resistance from employees. (continued on page 79) January 2013 | Construction Equipment Distribution | www.cedmag.com | 67 66_A Closer Look_KP.indd 67 12/21/12 3:25 PM