Elektro International – Take care of your worries with Vendor Managed Inventory

Optimizing internal logistics is often a challenge for panel builders, from grab stock management to control over delivery times. Especially when production is spread across multiple locations, such as at Elektro Internationaal (EI) in Woerden. In 2016, the company already took a major step, together with itsme Connected Business, at the series production location. This involved the introduction of Vendor Managed Inventory (VMI) in the form of a 2BIN system. EI hopes to start construction of a new building soon, where all activities will take place under one roof again. Then the logistics for the entire production will also be optimized.

Elektro Internationaal is one of the larger players in panel building and control technology in our country. The company designs and builds distribution and control cabinets for various markets, from utility construction, data centers and healthcare institutions to retail, chemistry and the pharmaceutical industry. 

EI has 115 employees, including a flexible shell, and works spread across four buildings (total 4,500 m2) in Woerden. This is far from optimal for the efficiency of production and internal logistics. There are plans for replacement new construction (6,000 m2). If a permit is granted this year, the new building can be put into use at the beginning of 2025.

Logistics professionalized

The logistics setup in the new building will be the responsibility of Ber de Vor. He joined the company on 1 August as a supply chain coordinator after graduating from the Hogeschool Utrecht in logistics management at EI. “That was about internal logistics, but also about ordering methods and contacts with suppliers. Now I am looking at how we can optimise logistics processes. As long as we still have different locations, there is room for improvement in internal transport. In that respect, I am looking forward to the new building. I want to work out the layout as completely as possible and to do so, I will consult with suppliers such as itsme.” “The existing situation also involves optimisation”, emphasises Bart Ranke, manager Finance, Logistics and ICT. “We have already professionalised our logistics processes to a reasonable extent. In 2016, we opted for VMI in the form of a 2BIN system for gripping materials at our largest location, for series production. As a panel builder, we mainly use the Schneider Electric brand; we obtain most of our electrical components from that brand. For gripping materials such as wire and fasteners, we have had a long relationship with itsme. This has been further intensified with the introduction of the 2BIN system.”

“itsme was the most flexible party for material delivery”

“VMI is one of the logistics concepts that itsme offers,” says Dennis Hermans, account manager OEM at itsme. “With a calculation of the total cost of ownership, we were able to demonstrate that it was worthwhile to place low-grade materials for series production in a VMI system. The major advantage of this for EI is total unburdening for these products; it has led to a reduction in purchase orders and the number of creditors. Downtime, which is certainly not allowed in series production, is also avoided with a VMI system managed by itsme.” At EI, it was the 2BIN system, with two bins for each material. If one is empty, the customer uses the other, while itsme replenishes the stock in the empty bin. “EI chose itsme as a VMI partner because of its flexibility,” says Ranke. “We have preferences for certain materials that we use in our cabinets and itsme was the most flexible party in terms of material supply.”

New technical challenge

“In the new building, EI wants to implement VMI for the entire production, including the production of cabinets in small quantities,” reports Ranke. “We use different materials for that, so there will probably be multiple 2BIN racks in the new building, with different contents. Ber can study that.” Then EI can achieve even more profit in logistics. “We will simply make the biggest efficiency improvement by moving from four buildings to one building. We save on personnel, traffic and walking routes, because we no longer have to drive back and forth with materials and grab stocks if there is a shortage somewhere.” Hermans: “For us, the most important profit is that we can maintain the continuity in the relationship with EI and continue to make a demonstrable contribution to their success. We have once again demonstrated the added value of itsme by means of an optimized VMI system.”

“The new building will contain several 2BIN racks”

EI has its hands full with the logistical set-up of the new building, which will hopefully be completed soon. “However, there are more ambitions,” says Ranke. “Control technology is currently a sideline for us, but we want to grow in that area. With the current shortage on the labour market, it is great to be able to call on a partner like itsme, which has specialists in-house for programming components.” Hermans will certainly welcome that. “We can be of even more service to EI at their new location with our logistical concepts and we will also see what else we can do for them in the field of control technology.”

No worries

This keeps the collaboration alive. “The 2BIN system ran smoothly from the start,” says Ranke. “In the first few months, we had to do some fine-tuning of the order quantities and the selection of articles in consultation. After that, the process was clear to all parties and went well. That is still the case. Our location manager recently indicated that communication is going well, for example about major projects that are coming up, so that the order quantities are increased on time. It is simply nice that we can discuss such things with someone from itsme on site, that there is interaction and that not everything is arranged via the computer. We thought that we could handle it ourselves, but it is still good that it is assigned to a party that works on it every day and can relieve us of our worries.” “That is exactly what the system is intended for,” emphasizes Hermans. “We come every week to scan and replenish the stock; EI does not have to worry about that. In the background, we also perform backorder monitoring on the 2BIN materials. Every week we run reports and if there are items in them with a lead time above a certain term, we consult with EI. It's about unburdening."