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Capabilities
WESCO’s capabilities extend across all solutions to your MRO requirements, whether in the form of a Single Source Commodity Supply Agreements program, or a more comprehensive Integrated Supply Program. Some of these key capabilities are:
- e-Commerce Support
- Inventory programs
- Price Reduction Programs
- Training
- Product Substitution - Standardization
- Supply Base Reduction
- Continuous Improvement Programs
e-Commerce Support
WESCO's philosophy is that e-commerce and supply chain alliance agreements go hand in hand.
e-Commerce requires a supplier partner with not only the technology, but also with all the building blocks that make a good supplier in the first place – people, processes, quality products and experience. An alliance agreement will benefit from e-commerce technologies that eliminate duplication and connect the two organizations on a mutual path towards supply chain optimization.
WESCO is a leader in MRO e-commerce technology. Since 2000, we have established connectivity and built customized catalogue content with numerous customers and catalogue format exchanges employing a wide variety of ERP systems procurement engines. Ariba, Commerce One, I2, Maximo, JD Edwards, Datastream, Aspect, SAP, TPN Register – your system requirements are not a barrier to WESCO.
Whichever enabler you choose WESCO is prepared to connect. You can log into our website, connect directly to WESCO via EDI or XML or we can connect together through an exchange of your choice. Your custom catalogue can be hosted on whatever servers you choose.
Customers have numerous options and challenges in considering their route to integrating their MRO procurement with e-commerce tools. Selecting the right suppliers with not only the e-commerce capability, but the proven supply chain processes is a key requirement for success.
Inventory programs
Inventory reduction addresses your need to reduce in-plant material stocks. Inventory management addresses the replenishment process, and assures you of a reliable supply of product at the lowest total cost.
The cost in carrying excess inventory can be significant.
| Inventory Value | $1,000,000 |
|---|---|
| Financing (11.0%) | 110,000 |
| Direct Labour | 117,000 |
| - 3 Employees @ 30K(30%) Fringe - 39K(3) Facilities | 100,000 |
| - Annual depreciation, building & equipment Variable | 24,000 |
| - Heat, light, insurance, etc. Control | 36,000 |
| - Misc., administrative, etc. | |
| Total Inventory Carrying Cost (ICC) | $387,000 |
| Note: For every one thousand dollars of annual inventory, the carrying cost is $387. |
As this typical analysis shows, the cost of carrying MRO inventory can quickly approach the cost of the items themselves. Our experience shows carrying costs of 30-50% of inventory value, depending on the customer.
As the brief descriptions indicate, we have the knowledge and experience to successfully execute a number of programs targeted at achieving reductions in inventory investment.
| Disposition of Excess and Obsolete Inventory | We analyze your inventory and identify items that could be readily sold to other customers, returned to manufacturers returned to WESCO or sold to salvage companies. |
|---|---|
| Inventory Classification | Each item is classified based on item type and/or historical activity and proper stocking levels established. |
| Consignments | Based on an evaluation, groups of items are identified for consignment and a suitable program is proposed. |
| Bin-Stock Replenishment | If allowed by internal plant policy and location, this process can optimize the Just-In-Time delivery concept. |
| Part Standardization | We utilize our manufacturer's expertise to help you evaluate and test products that would eliminate the need to source multiple suppliers |
| Part Substitution | Utilizing our manufacturer's expertise, products could be evaluated for form, fit, and function equivalency, with potential substitution resulting in lower total cost. |
Vendor Managed Inventory - Stores Management Options
There are many versions of Material Supply (often referred to as vendor managed inventory (VMI) programs) common to today’s marketplace, and WESCO is involved in all of them.
Each VMI is designed to respond to performance improvement objectives defined by you. For example, an on-site trailer is often the choice of the customer or electrical contractor who wants no direct responsibility for maintaining a reliable supply of materials on-site for a construction or major expansion project. A version of storeroom management might be the perfect choice for an industrial customer who’s manually controlled inventory system needs more time and attention. Just-in-time deliveries can be an excellent solution for the manufacturer who demands smooth production runs with minimum inventory investment.
Each step upwards will bring a higher degree of commitment therefore a higher cost. For example, the move from "Systems Contract" to "Bin-Stock Replenishment" requires that WESCO personnel perform activities that would normally be performed by the customer. If the stock is consigned, it requires that WESCO carry the inventory investment until the product is consumed, rather than being carried until the product is shipped.
When we engage in Storeroom Management, WESCO manages the entire operation of a plant's storeroom, tool crib, or maintenance area, including the performance of receiving, inventory control, and disbursement functions.
Each of the versions of Material Supply is more complex than the traditional “sell it, then forget about it” mentality. In practice, the arbitrary boundaries that separate versions are crossed regularly and it is common for a customer to implement a combination of two or three approaches.
Price Reduction Programs
WESCO has a documented record of success in driving continuous price improvement through a variety of methodologies. Increasing the leverage position of your company can be achieved by placing incremental volume with a supplier that is positioned to provide both savings and value-added services in return. The listed methods are employed as a means to achieve that position.
| Volume Leveraging | Part Standardization |
| Part Substitution | Reduced SKU’s |
| North American Sourcing | Increased Manufacturer Technical Support |
| Target Pricing | Improved Support of Critical Spares |
| Tri-Lateral Negotiations | Improved Unit Price |
Competitive Pricing - Price Leadership
WESCO in Canada supplies more than 200,000 electrical, industrial, and data communications products. In order to bring you quality material and the selection you need at the most competitive price, we purchase from a diverse group of more than 3,000 suppliers. We partner with leaders in every product category. As one of Canada's largest electrical distributors we have the influence to ensure our National customers receive world class pricing support.
Training
Product training is an integral part of the WESCO implementation process. WESCO pro-actively participates in coordinating product and service training, primarily through representatives from our extensive list of manufacturing partners. The Local Implementation Team (LIT) identifies the product and/or type of training desired. WESCO will then facilitate scheduling with the targeted manufacturers.
An associated support mechanism to the training initiative is the use of In-Plant Trade Shows.
Assuming total responsibility for all planning and set-up aspects of this event, WESCO has experienced great success and a high level of satisfaction among the customer’s product user community. This approach serves as a means to communicate with multiple departments, and to provide information on multiple products.
Product Substitution - Standardization
WESCO combines spreadsheet analysis with manufacturer negotiations to standardize nomenclature, customer part numbers, and usage at both the manufacturer and item level.
Your Companies Contribution
- Provide historical usage of inventoried items.
- Support a qualified substitution/standardization approval process internally with a product standardization program in place, customers will generally experience additional savings along four key dimensions. These include: Elimination, Reduction, or Redesign of Redundancies in the Supply Chain.
- Focus on Higher Value-Added Activities.
- Improvement in Asset Utilization.
- Creation of a Culture for Continuous Improvement.
Supply Base Reduction
There is significant value to be gained by reducing the number of suppliers you deal with. Typically, an Industrial client may have several thousand suppliers on their books, including hundreds of suppliers they will deal with only once in their lifetimes. Each and every one of those suppliers costs money to add to your sourcing database. Often the price of adding a new supplier will far exceed the cost of goods you may purchase one time from them.
Having fewer suppliers makes sense for a lot of other important reasons. Fewer suppliers mean fewer people for your own staff to deal with, thereby creating an opportunity to maximize the value of time spent with your people. It also means a greater commitment from suppliers who have become a true partner with you.
Continuous Improvement Programs
Continuous Improvement at each of your locations is created from a wide variety of initiatives, including the cost of procurement, standardization and substitution programs, training initiatives and other important areas such as uncovering ways to do things more efficiently in your plants.
WESCO is justifiably proud of the success that we can point to when it comes to lowering the total costs of procurement. We don’t just sell product. We provide the best product sourcing strategies to continuously drive overall costs down.
Using proven methodologies, WESCO will work with your company to:
- Consolidate the supplier base to those suppliers with the best cost/quality characteristics.
- Streamline the process to remove cost by working with you to decrease the number of different products in the supply chain.
- Improve the order process itself to make it quicker, more efficient, and more manageable.
- Work together to help achieve whatever meaningful goals you identify.
WESCO’s commitment to continuous improvement is the same as yours. It’s how we earn the right to be your supplier – by adding value to your business through working together.
