Management of a large cooperation is more complex than it ever was. Transparency requirements due to regulatory or stakeholder pressure are steadily rising, requiring a higher density of information to be accessible in shorter periods of time. BTI was approached by a large steel processor that was focused on reducing its net debt given recent publications by its credit ratings agencies and had identified that a significant amount of cash was tied up in inventories. BTI’s task was to reduce inventory levels without losing the competitive bulk buying price the customer received from suppliers. The customer also required BTI to implement all flows into its newly implemented ERP system whilst the suppliers still used paper orders.
BTI addressed the task by placing purchase orders to the suppliers from a customer exclusive trade company at price levels advised by the customer.
As the customer’s purchasing department did not lose communication with the supplier, they were still able to set target prices that were achievable.
At the same time all orders were routed through BTI with physical storage at the customer’s site in a consignment warehouse. The customer was able to send EDI purchase orders to BTI, governed by a frame contract. These purchase orders were for whole shipments and for a fixed price but with only a latest delivery date. BTI translated these orders into paper orders and placed them with the suppliers. Once the shipments arrived in the consignment warehouse, the customer’s EDI system sent weekly requirements to BTI to be handed out and invoiced.
BTI designed a tailor-made electronic dashboard solution, giving the customer real-time access to information about material location throughout the supply chain. The customer now has a single source of live information about the entire supply chain.
Not only did the customer reduce its net debt and maintain its rating, but BTI’s link in into its ERP solution allowed the customer to detect patterns in purchase price fluctuations leading to substantial savings.
Overcoming the challenges
of international logistics and warehousing
Bringing tools on balance
only when they start generating contribution