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Redefining What "Available" Means Yields Hundreds of Thousands of Dollars Per Year in Savings for Applied Textiles.
Applied Textiles had costly problems with wasted fabric and latent inventory. Then they used V3 Systems' supply chain technology to turn latent and lost inventory directly into profit.Applied Textiles custom cuts furniture fabric on demand for one of its major clients, Steelcase. But Applied Textiles would typically cut a 24-inch wide swath from a 60-inches-wide fabric and forever lose track of that 36-inch remnant (called an “offall”). With no way to track them, offalls would stack up, and Applied would pay to dispose of them. Lost revenue per year: $350,000 on every 500,000 yards of fabric processed. Expensive.
The complexity of recovering that waste was a daunting inventory management task: Applied Textiles essentially serves as a 3PL for Steelcase, and keeps on-hand 700 standard fabric colors. The SKUs exponentially expand from there, as each color has variances for color, weight, and pattern. Applied Textiles brought in V3 Systems—a WMS/SCE system—and now generates a bar code (specifying size, color, pattern, and weight) for each offal to make it visible and available where it hadn’t been before. (Applied wrote a short “front end” code to ensure that the proper data fields were filled out to identify the remnant.) Among other WMS and SCE functions, V3 Systems provided a “Digital Dashboard” that allows any of the 40 Applied Textiles users to see all available fabric—remnant or not, down to the last thread of specification—at any time. Today, nearly every scrap of remnant is used. By using V3 Systems technology, Applied Textiles was able to redefine what “available inventory” means, and recover hundreds and thousands of dollars annually of lost revenue in the process.
V3 Systems also allowed Applied Textiles to keep dramatically less inventory on-hand. Here are the numbers: Steelcase had been carrying a huge backlog of fabric, but Applied Textiles used V3 Systems to properly account for that latent inventory and allow visibility to it. Then, to help build its relationship with Steelcase, Applied Textiles bought that inventory from Steelcase to resell in the aftermarket. Upon logging the inventory, Applied Textiles found that Steelcase didn’t have 200,000 yards, as they had thought, but 300,000 yards. With the visibility offered by V3 Systems, Applied was able to move that inventory, and turn it into revenue. Today, Applied Textiles owns the inventory in the Steelcase relationship, and it is highly motivated to load-balance that inventory to Steelcase’s purchase orders. Before V3 Systems was implemented, Applied carried up to 300,000 yards of on-hand inventory for the Steelcase contract. Today, with the visibility and supply chain optimization of V3 Systems, Applied Textiles carries just 60,000 yards, and with third facility coming online for increasingly forward deployment of inventory, Applied Textiles is moving that down to 35,000 yards on-hand; this is with a fabric cutting process that consumes 41,000 yards each month, and has a 4-week lead time from the mill. Inventory reduction cost savings over a year: $XXX,XXX.
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