About the company
In 2020, one of the country's leading telecommunications and digital solutions companies suggested to its suppliers to have a Vendor Managed Inventory (VMI) on an easily accessible platform, allowing them to view in real time information referring to their supply chain. FYCO, a supplier since 2016 for this company, took action and, after a thorough analysis, developed its own VMI.
The challenge
The first challenge for FYCO was to develop the VMI - a subject in which FYCO lacked expertise - and provide the operator with accurate information in three areas: quantity of products in production, quantity in transit and availability for immediate delivery. This would allow the customer to map complete demand and input rotation.
Even though the development and implementation of a VMI requires a significant investment, the client is not obliged to purchase the products displayed there, so finding an alternative for those products that were overstocked was another of the challenges that FYCO had to face.
“At FYCO, everything revolves around the customer: a company requests something and the team comes together to satisfy this need.”
Country Manager FYCO Colombia
The strategy
- A solution known to the customer
The technology chosen to develop the platform was Power BI, a Microsoft data analysis service with which the operator's staff was already familiar.
- Talent dedicated to the project
After developing an internal inventory report from the IT area, FYCO hired a person to be 100% focused on the design of the platform.
- Teamwork
Several areas of the company, including Administration and Finance, participated in the assembly process.
- Understanding what the customer needs
FYCO anticipated the client's supply needs in order to have stock of supplies (mainly fiber optics and NAP boxes) in a timely manner.
- Products for critical sectors
The client requires its suppliers to use the VMI to show that they actually have the requested inventory in real time in the three areas mentioned. However, it is not obliged to purchase all of the products displayed. Faced with the risk of having overstock, FYCO implemented a VMI model for several countries in the region, which allowed it to offer products not purchased by the operator to other companies with a presence in Latin America.
- Warehouse rentals in China
In order to speed up logistics, large stocks were stored in warehouses in Shanghai, which allowed FYCO to have inventories ready to be shipped from there to the country that requires them (Colombia, Panama, Peru or Ecuador).
“Developing the VMI helped us to integrate as a team and become more aware of the business.”
Country Manager FYCO Colombia
Figures
- 1 year it took FYCO to develop a first inventory report to show a major telecom operator
- 2 years went into the development of VMI, until it could be operational in May 2022
- At least 50 products, from 5 manufacturers, are listed on the VMI platform
- 7 people from the aforementioned customer's team, with different roles, have access to the platform
- At least 3 people are involved in feeding the platform with data, which benefits the entire FYCO team and the telecommunications operator.
Results
- The right decision to stay in the race
FYCO's decision to develop VMI as soon as the client suggested it proved to be very successful: soon after, the telecom operator required it as a prerequisite to participate in its tenders, which gave FYCO an important competitive advantage.
- Time optimization and data access simplification
Having VMI helped FYCO staff to optimize the use of their time: some supply chain-related queries, which previously required internal controls, checks and meetings, are now solved with just a couple of clicks from the platform.
- Effective supply chain management
The VMI enabled FYCO managers to quickly detect surpluses or shortages, as well as understand when logistics are not effective. The statistics provided by this tool help to make better business decisions.
- Added value for other customers
As a result of this initiative, FYCO is ready to proactively provide its VMI to other companies. In fact, in bidding processes it already offers this mechanism, with the possibility of customizing the display and adjusting it to the client's needs and preferences.
- Customer satisfaction
The Purchasing and Supply team of the operator in question was extremely satisfied with the product and the service provided.
- Positioning
With this project, FYCO reinforces its position as an agile and creative supplier, focused on the client, and technologically prepared to develop the solutions that its clients need.