Siemens and Viking Electric Work the VMI Magic

Distributors and manufacturers seem to be adopting variations of the vendor-managed inventory process more widely, and a lot of the work is going to Datalliance. The VMI service provider, based in Cincinnati, points to Siemens and Viking Electric as an interesting case. Siemens has a High Value Partner program in which it works more collaboratively with key distributors such as Minneapolis-based Viking Electric. The partnership includes efforts to better manage inventory through Siemens' Inventory Collaboration Program (ICP), for which Datalliance Vendor Managed Inventory provides the foundation.

Viking Electric serves the electrical industry in the Upper Midwest with 24 locations in Wisconsin and Minnesota. “We were very impressed from day one with the detailed and systematic implementation approach that both Siemens and Datalliance took with us,” said Kathy Green, Viking production manager. “We held weekly meetings where members of our staff, Siemens and Datalliance all participated in a step-by-step plan where we addressed everything from a thorough data scrub to resolving terminology differences so we were all on the same page. This was very well planned and organized, and no one rushed the process. The result was a solid foundation for moving forward with confidence.”

Inventory management was one of the first areas where Viking realized improvement. Doug Herberg, Viking V.P. of marketing & materials, explained. “VMI gave us the information and visibility to fine-tune our inventory stocking plan to better reflect the actual demand trends of our customers. We found items that we actually did not need to stock and generally cleaned up our inventory to the point where we were able to reduce the value of our inventory by about $80,000 or 15%. That represents a significant cost savings for us. We are doing a better job of managing our inventory while we grow our business with Siemens products.”

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