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 VMI - a subject in which FYCO lacked experience - and provide the
operator with accurate information in three areas: quantity of products in production, quantity in transit and
availability for immediate delivery, which would allow a complete mapping of demand and input rotation.
Even though the development and implementation of a VMI requires a significant investment, the partner is not
obliged to purchase the products displayed there, so finding an alternative for those products that were
overstocked was another challenge that FYCO had to face.
“At FYCO, everything revolves around the partner: a company requests something and the team comes
together to satisfy this need.”
Country Manager FYCO Colombia
The strategy
- A previously known solution
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 the needs
FYCO anticipated the project'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 company requires its suppliers to show that VMI has the requested inventory in real time in the three areas mentioned above. However, it is not obliged to purchase the total amount of 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 company'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 it was suggested to it proved to be a wise one: shortly there after, the telecom operator required it as a prerequisite for participating in its tenders, which gave FYCO a significant 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 partners
As a result of this initiative, FYCO is ready to offer its VMI proactively to other companies. In fact, in the bidding processes it already offers this mechanism, with the possibility of customizing the display and adjusting it to their needs and preferences.
- 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 anagile, creative and technologically prepared supplier to develop the solutions that its partners need.