With neither manufacturers nor final customers wanting to maintain parts inventory, it's likely that in the future there will be just one level of distribution — in the middle. BEVCORe (www.bevcore.com), a supplier of parts for the beverage and commercial kitchen industry, believes it maintains and delivers the right inventory in the right place at the right time.
BEVCORe (the lower case "e" points to web-based electronic service capabilities) prides itself on having the correct stock available for its customers and being able to ship it on the same day it's ordered, or within 24 hours at the latest, says David Womeldorf, the company's vice president of marketing and information technology. The company claims it hits its shipment marks 99% of the time. Regardless of how a customer orders, they can view their order history and track their products on the web.
It's difficult to know what a customer will want or need since a part may not be required until equipment breaks. "There are large trends in the industry you can plan for," notes Womeldorf, "but there are things that can't be planned, for which you need to have stock. So, we need to be able to be intelligent in our planning and make sure there is enough safety stock available to respond to emergencies."
Almost five years ago the company was spun off — specifically as a parts supplier — from IMI Cornelius (www.cornelius.com), a manufacturer of beverage equipment. "We spun off to focus on parts," explains Womeldorf. "In addition to those of Cornelius, we also carry other manufacturers' parts, which was another reason to make us a separate business." In virtually every case, BEVCORe purchases its parts from suppliers or OEMs.
Located in Minnesota, from which it services the entire country, BEVCORe recently purchased a distribution company in New York that focuses on commercial kitchen equipment and parts. For moving parts from its warehousing to customers, the company supports many types of carriers, including next day, ground and less-than-truckload (LTL). Although still part of IMI with its global contracts with carriers, BEVCORe has its own preferences for shipping.
"Right now our preference for shipping ground is the logistics provider with the latest pickup," says Womeldorf. At the moment, that distinction goes to FedEx (www.fedex.com), thanks to its 7 p.m. pickup.
When it spun off from IMI, BEVCORe was allowed to start from scratch on all of its operations, including technology, which Womeldorf sees as a big advantage.
"We have implemented inventory demand planning software John Galt Solutions Inc. (www.johngalt.com) and use it every day in combination with our enterprise resource planning (ERP) system [Oracle Corp.'s PeopleSoft (www.oracle.com/peoplesoft)] for sophisticated inventory planning for all types of parts — whether they're in inventory or not. We classify our entire inventory based on number of turns and other things, including our guarantee levels, whether it should be in stock or not, as well as its size and weight. All of these factors have to be taken into consideration and are different for every product."
The company has also integrated High-Jump Software's (www.highjumpsoftware.com) warehouse management system (WMS) with its ERP system to automate its warehouse processes, explains Womeldorf. "We have a paperless warehouse. The only paper produced is a label or packing lists that gets shipped with product. Everything else is handled by wireless handheld units that are workdirected ."
Over time, working with its staff of developers, BEVCORe has continuously improved its WMS and is now able to "perform twice the work with half the people than when we began," claims Womeldorf.
Technology plays a critical part in maintaining stock levels. The company recently created a portal specifically for its suppliers. It permits a supplier to log on and view BEVCORe's inventory levels for the products they sell. Suppliers are able to watch demand fluctuation — via web-based access in real time — and see when levels go below a minimum. At that point they automatically send replacement inventory based on a blanket purchase order.
BEVCORe faces additional challenges when parts manufacturing moves off-shore.
"When you move overseas, especially with manufacturing, the parts component can be very challenging," Womeldorf points out. "You just can't have every service part that goes into a piece of equipment — there can be hundreds — sourced from China. You still have to warehouse them somewhere. It gets that much more complex with the Asian piece. There's no such thing as 'just in time' from China."
Being the inventory platform in the middle with the speed and service required by its customers has helped BEVCORe continue to grow.
"Parts are our business," observes Womeldorf. "Service companies and those fixing their equipment need parts. Manufacturers recognize that parts are a requirement to keep their customers happy and keep their equipment running."
Commercial equipment is very expensive, he points out, so the role of a supply chain middleman like BEVCORe is becoming increasingly important.