Hubbell: VMI Case Study


Hubbell reduces cost and effort while improving VMI program

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Picture this… You’re an international manufacturer of quality electrical and electronic products for a broad range of non-residential and residential construction, as well as industrial and utility applications. You operate manufacturing facilities in the U.S., Canada, Puerto Rico, Mexico, Italy, Switzerland, Brazil, Australia and the United Kingdom. You have been an integral part of the growth of the electrical equipment industry and a pioneer in the development of new products and technologies.

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What more, you are an early adopter of VMI. You saw the value in the early 90’s and recognised it as an opportunity to gain a competitive advantage in the electrical industry. In fact you conducted a study with Gartner Group to determine purchase order transaction costs and found that traditional manual purchase orders cost $30-55, EDI transactions cost $3-5, and VMI transactions cost $1-3.

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But, although you’re realising value from your existing VMI program, the costs and effort to support and maintain your system are high. You have to dedicate three full-time IT resources to maintain the IT infrastructure required to keep your VMI program running smoothly. This effort and its associated cost provides no value to your business and is an additional overhead expense for your VMI program.

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So, You move to TrueCommerce to take advantage of the latest technology and the Software as a Service (SaaS) approach. Our solution gives you all the benefits of your existing VMI program and more – but at a much lower cost. By taking your IT system and infrastructure costs out of the picture, you dramatically reduce the costs of running your VMI program.

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Now, you’re enjoying the benefits of your new VMI solution. We help you work closely with customers to get the right mix of products on the shelves, the right mix creates better turnover and increases sales velocity. You can now see and track actual customer demand on a daily basis which allows you to anticipate appropriate quantities and timing of replenishment orders. With the daily insight provided by TrueCommerce you have eliminated what amounts to a two month blind spot, allowing you to proactively address market trends and smooth demand variations. Crucially, you achieve all of this whilst concentrating on running your business and not getting tied up with the IT requirements of running a VMI system. You no longer have to update and maintain software, backup files, deal with data acquisition problems, and perform all the IT tasks that previously consumed valuable time and budget.

„Eliminating the IT resources and costs has allowed us to re-allocate those resources to direct value added activities – We are now able to focus 100% of our activity directly on customers.“

John Riley Manager of ePrograms, Hubbell Incorporated