Financial Applications For Inventory ManagementFor distributors and retailers to move from "just-in-case" to "just-in-time" principle inventory material management, product and information pipelines must be shortened. We at Toshiba America Information Systems (TAIS) learned that lesson around the time each of our business units or divisions had its own distribution organization. There were many warehouses at corporate headquarters in Irvine, CA. This formed, in effect, a series of little distribution companies operating independently within a single facility. Each had a small staff, its own equipment, and its own inventory of shipping materials.
TAIS is an office automation products company with over $ 1-billion in annual revenues. Products include laptop computers, printers, disk drives, electronic key telephone and PBX systems, copier systems, and fax machines. Warehousing and distribution for these products involves managing 300,000 sq ft of warehouse space in Irvine and in Parsippany, NJ, as well as the space at distribution centers throughout the country. A consulting firm was brought in to determine what the company could do to achieve competitive advantage in the marketplace. The verdict: those little distribution companies would have to go. There was a lot of overlap in function - and a lot of leverage to be gained by combining them into a single entity. A vice president of corporate logistics was named to oversee this entity. It was clear that computer technology was key to managing the new, much larger warehousing and distribution enterprise. One of the major challenges was to move from batch to an on-line, real time computer environment. Batch systems would not permit transactions to be processed and information to be moved with the accuracy, speed, and flexibility required. We considered integrating the system ourselves, but we lacked the time needed to develop the necessary skills. We determined it was best to select a distribution specialist. We signed a turnkey agreement with IBM. They offered a complete distribution system, the Application System/400 operating on the IBM AS/400 mid-range computer. IBM also provided the modifications required. We did a cost/benefit analysis for this project, but it had little impact on the funding. A real time system's strategic benefits outweigh its return-on-investment. Nevertheless, the analysis showed we would have been foolish not to implement a real time system. The savings in manpower alone should more than pay for the system in a very short time. An AS/400 model B70 dedicated to distribution runs the system. The system is connected to the corporate host - another AS/400 B70 - which runs order entry and financial applications. Since TAIS' computer platform was the IBM/38, predecessor to the AS/400 line, migrating to the AS/400 for distribution was easy and did not require replacing the order entry and financial systems. Currently installed on the AS/400 is a system which controls inventory down to the pallet and serial number level. This system includes: Teklogix 7020 hand-held radio frequency (RF) devices; Teklogix 8025 mobile RF terminals mounted on lift trucks; Symbol Technologies bar-code scanners; IBM 3477 terminals and displays (linked to the AS/400) Zebra bar-code printers. |