Chicago Rawhide is the world’s leading supplier of fluid sealing devices for truck, automotive, farm equipment, aircraft, heavy machinery, and machine tool industries. The company also supplies SKF bearings to the vehicle service market in North America. In all of its service markets, including automotive, heavy-duty fleet and industrial, Chicago Rawhide’s success is directly linked to their ability to move their products to distributors quickly and efficiently.

The company's Director of Electronic Commerce, Craig Young, states, "As we are constantly striving to improve our overall business processes, we focus specifically on areas that directly impact our ability to service our customer demands. One way in which we have realized significant gains is by using Datalliance, a VMI-based e-commerce service, from EDM, (Enterprise Data Management).

We believe that Vendor Managed Inventory (VMI) not only helps increase sales for us and for our distributors, but it also allows us to build stronger, more loyal customer relationships. In addition to being the preferred supplier based on product quality and price, we want our customers to recognize us for superior customer service performance."

In the early 1990’s, Chicago Rawhide researched the concept of Vendor Managed Inventory. Young recalls, "We were immediately convinced that both our company and our customers could benefit substantially from this approach to inventory management. Our challenge at that time was that we did not have the resources or the detailed knowledge to seriously pursue VMI. A few years later, several industry associations were praising the competitive advantages of VMI. This exposure re-ignited our interest.

Our objectives for VMI were simple, yet very strategic – VMI was a means to increase product sales and improve efficiencies for both our distributors and Chicago Rawhide."

Prior to selecting a VMI solution, Chicago Rawhide reviewed a variety of alternatives. They sought a solution to fit the functional requirements of their industry and customers. Young explains, "Our primary concern was the ability to review and report inventory activity daily and execute replenishment orders for a high number of individual parts on a weekly basis. We found that Datalliance from EDM was the best system match for our industry. In retrospect, the Application Service Provider (ASP) model that Datalliance employs turns out to be just as important as the system functionality."

Many of the systems Chicago Rawhide investigated were traditional software packages that the purchaser must install, test, and then customize for their implementation. They realized that this traditional software implementation approach would require hardware investment, IT staff, and most importantly – time. Young emphasizes, "We didn’t have a surplus of any of these necessary resources. Providing Datalliance through the ASP model allows us to ignore the typical hardware and software issues. EDM manages all of those variables for us. As it turns out, scalability is not even an issue that we worry about. As we bring more distributors and parts online EDM ensures that the software and hardware are capable of handling our ever-increasing volume of customers and transactions. With these issues in the hands of the experts at EDM, we can focus on our business where we are the experts!"

Timing was another deciding factor for Chicago Rawhide. Once they sold the benefits of VMI to their key distributors, they were committed to realizing the vision they had promoted. "Once again, the ASP approach proved to be an advantage, as we were able to implement the system quickly," states Young. "Minimizing our upfront time, resources, and costs allowed us to realize a much quicker ROI. That continues to be the case today, as we are able to bring on additional distributors quickly and easily, with no additional people or hardware resources."

Chicago Rawhide initially implemented VMI with several of their progressive distributors. "One of our first distributors to utilize our VMI system was Midwest Wheel, a major customer in the heavy duty market with five distribution warehouses," explains Young. "Midwest Wheel is aggressive when it comes to initiating new and better ways to run their business. Their objectives are to streamline the process of doing business with us, reduce inventory, and increase sales. Though this seems like the ultimate wish list for any distributor, their results are quite impressive."

Steve McEnany, Assistant Vice President Marketing and e-Commerce, Midwest Wheel, says, "We have increased sales 14%, decreased inventory 13%, increased inventory turns 50%, maintained in-stock performance at 99%, and decreased administrative costs associated with inventory replenishment by 50%." Young comments, "These positive results were realized in only eight months and at a time when the overall industry was experiencing a 12% downturn in demand. We fully expect these results to improve even more with time. In response, our sales to Midwest Wheel increased accordingly over this time period." Midwest Wheel has also found that VMI enhances their daily business processes. McEnany continues, "By generating replenishment orders for our individual branch locations, VMI helps us eliminate the need to transfer product from warehouse to warehouse. This improves our customer service and makes us more efficient."

The success of the VMI project with Midwest Wheel has provided such significant results that they are now bringing more of their business to Chicago Rawhide. "Many of the cost savings with this customer can be traced to the improvement in the overall way of doing business with VMI," states Young. "Through the VMI information that we receive daily, we have a much better understanding of the sales patterns and trends of our distributor. By better knowing their business, we are now able to be proactive in planning for, and satisfying their demand for our products. For example, as a result of the daily VMI communication, we have totally eliminated purchase order data errors. This ensures quick and accurate order processing. Prior to VMI, it took time and resources to resolve these errors that potentially caused shipping delays."

Young concludes, "We see the benefits of VMI continuing at Chicago Rawhide as we expand VMI to more of our distributors. Some of our greatest advocates for VMI are our customer service managers. They are closer to their customers and now have the information and understanding of their customer’s businesses to be proactive in their support efforts. Close working relationships build customer loyalty – that’s a difficult thing to build in our markets and an invaluable asset for any business."

To achieve real cost savings, the entire supply chain needs to work together. Enterprise Data Management (EDM) is uniquely qualified to deliver solutions that transform customers and suppliers into collaborative trading partners. EDM is an Application Services Provider with more than 10 years of experience designing, developing, and executing mission-critical supply chain systems for Fortune 500 companies. Datalliance, a comprehensive VMI-based e-commerce service, is the product of EDM’s extensive industry and technology experience. Datalliance enables suppliers and their customers to quickly and easily establish effective VMI relationships and facilitates collaboration across the Internet. Privately held and employee owned, EDM was established in 1991 by Carl Hall, President. The company is based in Cincinnati, Ohio.