Why inventory is critical to a healthy revenue stream

A large southwestern industrial manufacturer had experienced a number of supply chain issues with their components supplier, but this particular issue was among the worst. With no relays in stock and none in the pipeline, they were forced to fully stop their production line for nearly two weeks—causing the company to lose more than half a million dollars in revenue each day the line was down.

Several urgent calls to back-up suppliers for a cross-reference relay were unsuccessful. The company reached out to Omron distributor Heilind Electronics—a national partner boasting a large inventory of Omron products in North America. Heilind acted quickly and immediately contacted their Omron account manager Nita Graswich, to identify compatible models that are standard stock items.

"We worked with the customer closely to spec and gain approval of the [MY4DC12S] relay and [PYF14AE] socket," Graswich said. "We had the parts that the facility needed on the shelf— hundreds of them in fact. We had them back in production quickly."

The reason Omron was able to come to the rescue when others could not, Graswich explained, is in large part due to Omron's dual-tiered inventory system. Omron maintains an extensive supply at their Chicago area distribution center, as well as at distributor sites throughout North America. 

"Keeping extensive inventories at multiple locations is a rarity in today's economy due to the high carrying costs, but it pays off for our customers--helping them maintain steady, reliable product delivery and avoid expensive ‘line down’ situations," Graswich said. "Every customer I mention this to gets excited and finds comfort knowing that we will likely have stock in Chicago if the local distributor doesn't have stock on their shelves. It's a great benefit of working with Omron."

Also of great benefit, as the industrial manufacturer is finding, is Omron's competitive pricing and outstanding product reliability.

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"Their product engineer told us that he feels confident that if he designs in an Omron component that he won’t have to touch it again due to failures,” noted Graswich. "He also said that he's finding that our products give them and their customers an outstanding mean time between failure (MTBF)."

With the high quality, competitive pricing and outstanding delivery record of Omron components, the company has kept the Omron relays specified for more than two years, and has since had other opportunities to benefit from Omron responsiveness.  Only a few months after their first Omron save, they had another costly ‘line down’ situation and needed to quickly spec a new power supply. Graswich had product samples and specifications in front of the company within days, and after weighing their options against competitive products, Omron's proven track record at the facility, led them to quickly select the Omron power supply.

"Of course, it's always a package deal; our components provide superior quality at a competitive price and that's vital.  There's also a lot to be said about the fact that, as they told me, 'Omron has the products we need, when we need them’,” Graswich said. “They wanted a supplier they could depend on, and I'm proud that we have earned their trust and helped them successfully keep their line humming along."

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