It is now several years since micq-if was implemented by CBC. Brett Bartholomew reflects on what has happened over that time.

What have been the benefits you have achieved?

We have obviously achieved inventory reductions overall but the good thing about micq-if has been the way it does not just apply blanket rules to every situation. In some cases we have been able to reduce inventory by 50-80%. In others it has actually recommended small increases.  We have also reduced our emergency stock transfers by a third which has led to improved productivity and better customer service especially for the harder to get items which people are prepared to pay more for.

micq-if has allowed us to set overall policies and then the stock levels have been set consistent with these.  micq-if’’s optimisation approach has also meant that we have been able to tune the range and depth of our inventory as business conditions changed.

What is different about micq-if?

Besides the name you mean?  Well actually the name does capture part of what is different.  The MI stands for Matched Items.  When we embarked on our supply chain improvement journey one of the major issues faced by our branches was the failure of our old system to ‘match up’ our inventory. Customers would come in and ask for a bearing but also want a couple of seals to go with it.  The Matched Items capability in micq-if is administered by just one person doing a couple of hours a month for our entire network of 60+ branches.  The system recognises what products are sold with what and helps us quickly set up overall relationships … we have Kits too but the Matched Items capability is much more again.

The CQ stands for common quantities.  This part of micq-if typifies one of the key differences about micq-if. In the early days we went to the market and looked at several packages but found they often made overly simplistic assumptions.  In contrast micq-if takes into account the quantities in which products are commonly sold so it will not, for example, stock just one, when the product is sold in twos or fours.  This sort of feature means that rather than spending a lot of time on manual overrides for branch stock we now just set the rules and micq-if largely does the rest of the work for us.  We can focus more on our customers.

And then there is all the inventory optimisation, forecasting and supply planning … all integrated in one comprehensive package.  For example, it is great at picking seasonality, even when it does not rain at the same time each year.  It fits everything together in a way we did not see with other packages.

What have been the challenges in implementing micq-if?

Importantly we started with a very solid understanding of our costs and demand patterns.  We also did simulations of different stocking scenarios. Some of the results were not quite what we expected but it certainly made us think. We worked hard to establish the important fundamentals of our ‘optimum’ supply chain. This meant that branch staff embraced the system from the outset as they rapidly saw the benefits from the new approaches.

We did however have to work with the purchasing staff who had been used to ‘eyeballing’ the right order amount from simple monthly histories and forecasts.  micq-if takes into account over twenty different factors when preparing supply plans and purchase order recommendations.  Staff took a little while to get used to this at first but micq-if was extended with ‘review scores’ that helped us focus on the products that really needed our attention.  There is also comprehensive education and about a dozen training videos that make it easier and faster to get going.

So where does micq-if fit?

I think micq-if is an ideal fit for situations with multiple warehouses and medium to large product ranges with a mix of fast and slow moving products.  I guess that describes a lot of situations really, across many industries.  It has helped us improve our fast movers, our mid-range items and our slow movers … it enables us to manage the different strategies and have the system adapt to the different challenges of each part of our product range and our supply network.  And we can tailor the strategies right down to product groups or warehouses if we want.