Rexnord Improves End-Customer Service Levels with VMI

• Overall end-customer fill rates increased 4.9 points to 94.5 percent
• Fast-mover fill rates increased to 98.6 percent
• Stockouts reduced 82+ percent for fast movers, 47+ percent for moderate movers, and 23+ percent for slow movers

Rexnord is a leading worldwide industrial company comprised of two strategic platforms: Process & Motion Control (PMC) and Water Management. Within its platforms, Rexnord serves a diverse array of growing, global end markets by offering the broadest product portfolios and trusted brands in its industries

Rexnord committed to VMI as a key component of the company’s partnerships with distributors, to improve mutual sales and profitability. Rexnord’s VMI program has collaboratively improved the key metrics of increased fill rates and reduced stockouts.

The most recent Rexnord VMI partnership is with one of Rexnord’s largest distributor partners. The results within the first year with this distributor demonstrate an example of Rexnord’s overall VMI program success.

Rexnord initiated its VMI program with this distributor in late 2012 with one of their largest distribution centers as the pilot. After one year, the overall end-customer fill rate for Rexnord products was increased 4.9 points to 94.5 percent, with fast movers increasing to 98.6 percent. Over the course of the first year, VMI enabled Rexnord to collaboratively attain the balance of inventory availability and movement the distributor needed.

“In the first six months, VMI significantly reduced inventory and increased turns, but we both wanted a greater improvement in service levels,” says Mark Ganser, Rexnord eCommerce Specialist and Manager of the Rexnord VMI program with this distributor. “As a result, over the second six months, we worked together to adjust our planning parameters to achieve significant reductions in stockouts.”

After the initial six months, the distributor was so confident with Rexnord’s VMI process that they authorized Rexnord to place normal replenishment orders without their review, and simply requested notification of delayed orders or exceptional situations.

“The Rexnord VMI program has delivered significant benefits,” says the distributor’s DC Inventory Planning Manager. “We’ve greatly improved our customer fill rates and our overall inventory metrics are very good. Most importantly, we now spend far less time managing Rexnord products because we’re confident that the VMI process works well.”

Besides improving the distributor’s customer service levels, Rexnord’s VMI program has increased their overall inventory management capacity without adding any additional resources.