NEDIS relies on intelligent inventory management

Centralized and standardized purchasing process

The acquisition by Dätwyler prompted NEDIS to centralize its purchasing process. Previously, this function was spread across thirteen European countries. Now, NEDIS operates a single large warehouse in Den Bosch, which also serves as the hub for all purchasing activities. “We had previously been in contact with NEDIS regarding comprehensive supply chain optimization,” says CQM consultant Maike op het Veld. “But at the time, that proved to be a step too far. Much of the necessary data was unavailable, and there was no standardization in the ordering process. Together with NEDIS, we decided to focus first on optimal inventory management.” CQM began by developing an application featuring advanced algorithms for standardized purchasing forecasting and inventory management. The application integrates with NEDIS’s management systems and features a clear user interface designed to provide optimal support to the purchasing team. Maike notes: “The application marked a cultural shift at NEDIS. The benchmarks were no longer just purchase price and product availability; they now included optimal use of warehouse space and capital allocation. After all, it isn't difficult to keep a full product range in stock in large quantities at all times. The real challenge is stocking exactly the right quantity of each item to maximize the return on warehouse space and minimize inventory holding costs because a product sitting on the shelf costs money, too.” 

Green, orange, and red ordering advice

The purchasing application went live in 2014. Based on product categories, supplier lead times, purchasing volumes, and all other relevant ordering rules, a system was created that allows NEDIS’s buyers to order products at the right time, in the right quantities, and from the right suppliers. At the same time, delivery reliability for NEDIS’s resellers is guaranteed, and the entire process has been optimized in terms of costs, space utilization, and efficiency. Crucially, the application automatically provides ordering advice to the buyers literally using three colors. Green means: no action needed, order immediately. Orange: take a quick look. Red (or on the ‘attention list’): buyer, something unusual is going on here; this requires your attention. John Laurijsen, a senior purchaser at NEDIS, worked closely with CQM: “It’s an excellent system that we are now continuing to optimize together in practice. For instance, we want to understand why the application makes specific ordering recommendations. Sometimes, these run counter to our buyers’ ‘gut feeling.’ Face-to-face sessions with CQM help us understand the reasoning behind the advice and adjust parameters or algorithms if necessary. These sessions really boost mutual understanding.”

From gut feeling to calculated purchasing

Trust is the keyword for the cultural shift currently underway at NEDIS. Jack Breukers, Head of Operations & ICT, shares this view: “Our guiding principle is that we don’t want to turn customers away, yet we also want to maintain healthy inventory levels optimizing both space and capital utilization. The application helps us achieve this. Furthermore, we are now working according to a unified process. The next step is for our buyers to trust the application’s recommendations, so that we can eventually place automatic orders for the vast majority of our product range via the ‘green list.’ Naturally, this requires time and fine-tuning. But once everyone sees that the system works well, trust will follow naturally. After all, there are still people at the controls. In this way, we are shifting from gut feeling to calculated purchasing. A groundbreaking step, indeed but one that we at NEDIS never shy away from.”