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Matt Schron
General Manager, Jergens Industrial Supply
Supernova Award Category:
Next Generation Customer Experience
The Company:
Jergens Industrial Supply (JIS) is a leading industrial distribution company founded in 1960 and which touts itself as Ohio's largest, most technical industrial distributor of industrial products. JIS represents over 300 of the top manufacturers for industrial supply in the U.S. JIS believes it is not just a company that sells product to customers, but a Partner in Productivity. JIS is a division of Jergens, Inc., a manufacturer of standard tooling components, fasteners, hoist rings, vises and other work holding equipment. Some 30% of Jergen’s business comes through its JIS Inventory Solutions Group.
The Problem:
Like many distributors, Jergens Industrial Supply found itself needing to think outside-of-the-box to reinvent its value proposition in the midst of many disruptive forces. These included increased competition from industrial supply behemoths with vast order volume and buying power, as well as the need to cater to an uber empowered customer base that recognizes it has many buying options. Meanwhile as Baby Boomers head off to retirement, JIS was faced with redefining its value proposition for a new generation of Millennial buyers with higher expectations for a technology enabled friction-less customer experience a.k.a The Amazon Effect.
The Solution:
Keeping to its commitment to add value to processes and reduce waste, JIS set out to offer a frictionless inventory management solution for today’s real-time always-on manufacturer. This began with AutoCrib vending machine system deployment 7 years ago. The machines are stocked with inventory (up to 5000 items) at an agreed-upon price. Personnel get a unique pin code and “order” parts by scanning a bar code for items needed for the job. Parameters govern dispensing, i.e. workers are given access to one set of gloves every 24 hours. In 2015, realizing the opportunity to convert these vending machines into “smart machines,” JIS approached MindHARBOR to integrate them with its ERP system. Following this successful initiative, the two companies studied the early IoT Dash Buttons Amazon was bringing to market. From there, a plan to engineer a solution to support an elegantly simple on-premise remote product resupply from WiFi-enabled IoT buttons was born.
The Results:
At 3am, JIS vending machines “call home” to the JIS back office to place replenishment orders, which are automatically logged, receipts created, and labels/deliver tickets printed to send out with drivers. The JIS Express buttons--affixed to racks, shelving, on/next to equipment/drawers--are installed onsite and connected to an on-premise wireless network, and the back-end JIS ERP system. They are customized with a distributor’s name and/or the name of a frequently-ordered product. Pushing a button triggers an order. One push equals one item at a pre-configured reorder quantity, and a confirmation email is triggered. Once the button is pushed an order notification is emailed to a pre-approved order manager. These confirmation orders are emailed and include a link to the customer control portal with a secure webpage accessible by smartphone, tablet or PC. The order notification alerts track all buttons pushed in 24-hour period. The order manager is able to review, edit, and/or approve the items that were pressed in the past 24 hours. Customers can confirm an order, change amounts, add PO numbers and delivery requests. The system batches all items at 3pm every day so orders are built and reviewed each day by the customer. Confirmed orders go directly from the customer portal and import directly into the ERP system. Orders are reviewed and approved for delivery, and either shipped to the customer for replenishment or delivered by the distribution team.
Metrics:
JIS has 115 vending machines in the field. Since integrating these machines with its ERP solution, it has experienced 30% improved productivity, allowing the company to grow without having to grow its headcount. Outfitted with an iPad interface, drivers now cover more ground in any given day when they manually restock machines on their routes, since all they need now focus on is fulfillment.
JIS has also seen a significant reduction in customer service effort and costs since now product costs are negotiated up front, eliminating the need to quote items for replenishment, manage orders and purchase orders.
Since JIS has launched its JIS Express buttons in October 2017, demand has been substantial. JIS has been doubling the amount of buttons deployed in the field, as well as the amount of orders received, and corresponding sales volume every 2 months.
The buttons have proven to be an exceptional entry-level offering for smaller customers with lower inventory volumes. Additionally, the solution provides a replenishment method to manage and maintain larger oversized items that are too large to fit into vending machines. The JIS Express buttons cost only $10-15 each, as opposed to the vending machines that can run from $10,000 to $50,000.
The Technology:
- Epicor Prophet 21
- AutoCrib vending systems with integrated bar code scanning
- Commercial Off the Shelf IoT buttons
- iPads
- Amazon Web Services
Disruptive Factor:
The tool crib can be a “black hole” that can result in millions in products that are not used, lost, horded or misused. Inventory waste consists of the cost of carrying excess inventory, and the costs to finance, store and handle the inventory. JIS brings just-in-time inventory to a whole new “push-button” level. The inventory is consigned yet available only steps away, so manufacturers are billed for inventory as it is dispensed. The digital disruption project manifests benefits and efficiencies to the manufacturing floor and the back office simultaneously. When a JIS Express button is pushed, it represents hundreds and millions of dollars saved from the perspective of: Manufacturing floor workers–reduced walk time and “talk time” to get the tools and materials needed. Improved safety via quick easy access to all requisite equipment and supplies (i.e. safety glasses, hard hats, etc.). Manufacturing back-office personnel–reduced time and effort in contracting and PO processing. Improved inventory management visibility, traceability and accountability. JIS customer service personnel–reduced time and effort in contracting, order entry, and fulfillment. With its JIS Express buttons, JIS is attracting a new customer demographic, and giving customers a reason to keep giving JIS their business: a smart “sticky” just-in-time inventory management solution that offers ultimate convenience and can scale as they grow.
Shining Moment:
JIS is part of Jergens, Inc., which has both manufacturing and distribution under its corporate umbrella. The company is paying 20% more for steel since the tariffs took effect and has had to raise prices to cover this price increase. The company anticipates customers will likely push back against further increases, so the growth of JIS via its inventory management solutions provides a business strategy to offset these business realities.
