Camlab Ltd., a U.K.-based laboratory equipment distributor, has achieved a full return on investment on its purchase of inventory planning software in under six months. The company reports that it reduced inventory by 7.5%, reduced dead stock by almost 50% and increased productivity by 75%.
“In less than six months, we dramatically reduced inventory levels across all of our lines, and increased service levels at the same time,” notes Maurice Riley, Camlab’s operations manager. “We also gained a huge increase in our productivity.”
Before implementing the software, Valogix Inventory Planner from Valogix LLC, Camlab personnel spent at least eight hours a day sorting through spreadsheets to manually approve or delete the purchase orders its system recommended, Riley explains. After implementation, they now spend fewer than three hours a day and are confident that the numbers are accurate.
In 2007, Camlab acquired Patterson Scientific Ltd, combining inventories for a total of 40,000 SKUs and a value of roughly $2.4 million. Six months into the acquisition, Camlab had already reduced the inventory through write-offs and attrition, but knew there had to be a less costly and most efficient way. Six months after the inventory planning software implementation, Camlab realized a decline in overall inventory value down to approximately $841,000 and experienced a dramatic increase in service levels across all lines. Dead inventory, once valued at approximately $435,000, experienced a decrease of nearly 50% in just six months, to just $230,000. Finally, Camlab estimates it has reduced labor by 75% (30 man hours a week) or approximately $21,000 per year.