Diebold Selects Vector SCM As Partner For Supply Chain Overhaul
4PL to Design New Processes to Improve Cycle Performance, Productivity, Reduce Logistics Costs
Vector SCM (NYSE:CNW) has been selected by Diebold, Incorporated (NYSE:DBD) to provide process design, consulting and project management services for a strategic supply chain re-engineering initiative to improve Diebold's "Order to Cash" cycle.
"Diebold is a highly strategic new customer for Vector. We are very pleased to be working with this industry leader," said Greg Humes, Vector SCM president. "This is an excellent opportunity to take best practices and methodologies we have used to deliver proven results for many other clients, and apply these to achieve Diebold's supply chain transformation objectives."
The project is expected to roll out in several phases. The first objective is to benchmark Diebold's current practices to understand "as is" processes at work, and the links across the order to cash cycle. In this phase Vector is mapping the current state of the processes to identify gaps and recommend steps for improvement. A joint team of Vector and Diebold personnel is participating in this investigative and improvement identification exercise. Concurrent with the process mapping activity will be other projects tackling logistics costs, inventory and logistics network design.
"We have contracted with Vector SCM to help us streamline the flow of product from suppliers to manufacturing to our end customers," said Thomas W. Swidarski, Diebold president and CEO, in a recent investor conference call, noting that Vector would play a critical role in helping Diebold achieve its cost structure improvement targets.
Vector's engineering capabilities will be utilized extensively, noted Humes. Through these capabilities Diebold will gain opportunities to reduce network miles, increase cube utilization, reduce transit times and logistics costs, based on a Vector redesign of the Diebold network, focused on improved efficiency and reduced waste. Vector also will work with Diebold's 3PLs to ensure the most competitive pricing and time-sensitive performance for transportation services.
Vector also is supporting Diebold with implementation of a vendor-managed inventory (VMI) system for its manufacturing location in Lexington, North Carolina. Diebold recognized the need to have a central VMI warehouse near the plant to supply material as it is needed rather than having a number of warehouses across the country. This will benefit Diebold through lower inventory levels, reduction of logistics costs, and the ability to re-allocate resources to concentrate on its core business of manufacturing -- leading to improved customer satisfaction and elimination of waste.
Ultimately, Vector's work will help Diebold improve the reliability with which it tracks, measures, manages and understands global supply chain costs. The end result will give Diebold better visibility into logistics operating costs, and more accurate understanding of how various business decisions impact those costs. Defined areas of cost will be identified and housed in a central data warehouse allowing reporting and metrics for effective cost management.
The agreement is for a three-year period. Vector personnel are being staffed onsite at Diebold to facilitate speed of implementation and project deliverables.
About Vector SCM
Vector SCM, based in Novi, Michigan USA, is a joint venture of General Motors Corp. and Menlo Worldwide that delivers lead logistics provider services for GM's global supply chain operations, as well as other automotive and heavy industrial manufacturing firms worldwide. As a non-asset-based 4PL, Vector SCM provides transportation, logistics and distribution network design and management solutions across multiple service providers, as a neutral, single point of logistics cost measurement, reduction and control. Menlo Worldwide is the US$1.4 billion supply chain services subsidiary of Con-way Inc. (NYSE:CNW) . Con-way is a $4.2 billion freight transportation, logistics, supply chain management and trailer manufacturing company. Further information about Menlo Worldwide and additional press releases are available via the Internet at www.menloworldwide.com.