Futronics was a company worth two billions dollars until two years ago. They were doing good business making consumer products and government system and services. It had a good growth curve but destiny started to take a turn when Futronics was faced with competition from other companies. The sales dropped heavily and the profits decreased instead of increasing like expected. To combat the changing trends of the company, the supply management department started to experiment in a program that would help in countrywide reduction in costs.
Futronics started using central stores for their supply and delivery services back in the 1950’s. They had assumed that the company would incur huge savings from having stationary purchased and distributed in bulk along with other supplies. A central group was formed to take over these matters. The result was an increase in the number of employees, facility, delivery expenses; large savings resulted through reduction amongst individual office inventories, and a decrease in purchase order costs.
Currently, there are about forty-two sites that are being provided with supplies from one main warehouse at Lexington. Annual throughput was calculated to be about $900,000 while the individual inventory was about $ 140,000. For the five hundred items stocked, a catalogue was maintained that was updated every six months and distributed to all the sites. This involved four employees, two worked as pickers, one as order entry clerk, and one to wrap, label and load trucks. The demand for the supplies varied with time. The peak season was December when the calendars were made in large numbers. During the other se ...