Anglia introduces vendor managed inventory service for UK SMEs

UK component distributor Anglia has introduced a new inventory management service called 80/20 for SMEs. 80/20 is essentially Anglia’s take on VMI (vendor managed inventory), previously available only to large customers, in a special version designed to meet the needs of smaller companies.

The new service is available for all the commodity passive, electromechanical, connector and semiconductor components on the Anglia linecard, and it’s called 80/20 because these commodity parts typically represent 80% of the volume shipped to SMEs, which make up 20% of the total cost.

VMI, also known as ‘consignment’ or ‘in-plant store’ means an amount of the distributor’s inventory is held at the customer’s site for them to use as needed, and they pay only for what they use, when they use it. The distributor replenishes the stock per the customer’s forecast on a mutually agreed date.

For customers using a large amount of lower-priced commodity parts, the idea is that everything they need is available in-house immediately, so no risk of having to stop the line while they wait for deliveries. There are also cash flow advantages – the customer does not have to hold a buffer stock at their own expense.

The trouble is, VMI is notoriously complicated to manage and requires a lot of work on the customer side to train staff, produce manual reports on inventory and provide accurate forecasting, making it typically out of reach for SMEs.

“Anglia’s customer base is primarily small manufacturers,” explained CEO Steve Rawlins. “VMI was just too complex for smaller customers to manage, and the cost of managing it was high for both parties. We thought, how can we make this offering acceptable to SMEs – which is the bulk of the market?”

The answer is: with a new online inventory tracking system. This system, under development in-house at Anglia for 18 months, allows SME staff to quickly and easily manage their VMI inventory. Deliveries of components can be added into inventory with a single barcode scan for each big box (not each individual packet as required previously, which was laborious and error-prone).

Consumption is tracked and replenishment quantities determined by the system to make sure everything runs smoothly, even when using Euro, Dollar and Sterling accounts. There are auditing and stock-take modes, as well as configurable, downloadable reports available in standard formats.

There’s no cost to start using the system as Anglia provides a free starter pack, including a wireless barcode scanner and barcode cards to identify users. The online interface can be accessed from a normal PC or tablet. And (perhaps best of all) the system is completely free to use, once Anglia have determined that you’re a qualifying customer. Anglia also promises it will review the contract pricing regularly to make sure the prices always remain competitive.