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| Case Study |
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Patni's Vendor Managed Inventory solution eliminates stock outs and lost sales for client |
Patni's scalable VMI solution helped a consumer products major achieve a 50% reduction in its overall inventory levels.
The Client
A Fortune 500 company engaged in the development, manufacture and sale of a wide range of grooming products.
The Challenge
The client faced increasing pressure from major customers in Europe to implement a VMI process. The requests were driven by the proven gains retailers had achieved with peer companies in increased service levels with reduced inventories.
The client objectives were to implement a VMI solution to enable the business to improve service levels and avoid stock outs. Moreover, it sought to realize efficiencies/growth potential from aligning suppliers and key account demand plans via an integrated process.
Technically the solution called for the following:
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To facilitate the development of DP/S & OP replenishment of materials to ensure optimum distribution of goods. |
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To develop and implement SAP APO as the enabling software to gain improved integration of VMI processes with demand and supply planning processes. |
The major challenge was to arrive at a standardized database design to make it customer independent. To have a flexible design so that future customers could be added without any significant investments.
The Solution
SAP APO was chosen as the preferred solution to support the VMI process in alignment with the corporate systems strategy. It provided for improved integration opportunities with existing R3, Demand planning and Supply network planning modules, and Business Warehouse.
Patni adopted the following phases in the solution development.
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APO Prototype Development: This helped to meet corporate business requirements and serve as a template for the VMI Global rollout. |
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Design and Build Phase: |
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Enhanced the VMI functionality in APO to make it applicable in existing business scenarios. |
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Created a SNP Dashboard - A Replenishment Management and Reporting Tool. |
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Built SAP interfaces through Business Warehouse to integrate client application systems with the VMI solution. |
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Developed enhanced checks and controls, like ATP, and the capability to trigger related business transaction in a highly customized environment. |
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Decision Support through Business Warehouse: Developed a reporting system to provide complete visibility of the VMI business process, as well as to control the system processing cycle. The reporting system comprised the following reports: |
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BW DashBoard Report |
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BW Report VMI Missing Goods Analysis |
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BW Report VMI Summary Scorecard |
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BW Report VMI Detailed Scorecard |
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Movement History Report |
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Error Record Processing application. |
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The Technology
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SAP R/3 |
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SAP APO — DP, SNP |
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EDI. |
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The Benefits
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Patni's pre-built templates and design frameworks helped reduce the time for gap assessment and design. |
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The reusable components developed on the project made provision for future roll outs to be carried out faster. |
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Patni's familiarity with EDW, BW, and Custom objects, enabled a quicker turnaround time on all reports and dashboards design and development. |
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Automation of data upload reduced a number of data error problems. |
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Increased level of collaboration between the client and major retailers on the supply of products. |
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Increased service levels (between customer warehouse and stores) to the level of 99.6% from current levels of around 95% and thus reduction in lost sales due to product non-availability. |
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Reduction as high as 50% in overall inventory levels. |
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