Originally Published MPMN March 2009

ENGINEERING SOLUTIONS

Software Helps OEM Reduce Inventory, Improve Supplier Performance

The i-Supply platform enabled Stryker to share real-time forecast and consumption-rate data with suppliers

Stryker Instruments (Kalamazoo, MI; www.stryker.com), a provider of surgical instruments and pain management systems, suffered from inflated inventory levels caused, in part, by an inability to share real-time forecast and consumption-rate data with suppliers. Thus, it faced stock-outs and time-consuming supply-chain administrative issues.

Ultimately, the company wanted to give its U.S. and overseas suppliers a window into data stored in the company’s material requirements planning system—without administering a costly electronic data interchange solution. Project leaders also wanted to reduce inventory through more-efficient scheduling and replenishment processes. They also sought a means of rating supplier performance.
To help achieve these goals, Stryker selected i-Supply, a software platform from TradeBeam Inc. (San Mateo, CA; www.tradebeam.com). The platform provides real-time inventory consumption, forecast, and shipping information. It also offers visibility into the performance of each supplier. And because it is supported by a pay-as-you-go on-demand service, it can bring a relatively quick return on investment (ROI).
Because of an aggressive but flexible implementation schedule, TradeBeam’s i-Supply allowed Stryker to reduce inventories of selected parts by 16% in just 37 days. This result alone translated into immediate carrying costs savings and an ROI in excess of 110% for the first year, according to the company. Additional benefits included a 30% reduction in direct material inventory for Stryker’s Kalamazoo and Ireland facilities and a 30–40% reduction in finished goods inventory shipped to the company’s distribution centers in the UK and Japan.
The software enabled Stryker to better control the assembly process, especially by reducing excess and obsolete inventory. By lowering expedited freight, stock-outs of direct materials, and the supply-chain headcount, the company streamlined operations and increased efficiency—despite the 20% rise in direct material purchases. Cutting stock-outs has enabled Stryker to save thousands of dollars each month.
With i-Supply, efficiency proved to be a major goal in supply-chain relations. “Rather than send purchase orders to suppliers, Stryker asked suppliers to manage the replenishment process for them,” says Mark Lincoln, Stryker vice president and plant manager.
And suppliers have also benefited from the device manufacturer’s adoption of i-Supply software. Advance Turning and Manufacturing Inc. (Jackson, MI; www.advanceturning.com), for example, was able to reduce inventory levels and improve production schedules for parts to Stryker. Another supplier was able to schedule all shipments to Stryker on one day each week, saving both time and costs while improving customer service.
“With TradeBeam’s i-Supply, businesses like Stryker can receive real-time inventory, consumption, forecast, and shipping information,” says Graham R. F. Napier, CEO of TradeBeam. “TradeBeam’s solution enables Stryker to reduce inventory and monitor supplier performance by integrating multiple logistic systems into one, which ultimately results in an incredible ROI.”
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