JAE Europe saves £500,000 with supply chain technology

Demand planning time will be increased to 12 to 24 months

With better forecasting capabilities, JAE Systems is now able to rely on sea freight

JAE Europe expects to save £500,000 over the next 12 months with new supply chain management technology.

The European arm of the Japanese electronic connector manufacturer has chosen Infor SCM Demand Planning to manage its supply chain.

The technology will improve sales and operational planning for JAE Europe, enabling the company to save costs by depending on sea freight rather than air freight.

JAE Europe only receives stock from the Far East and the US, not Europe, and the majority of stock it brings into Europe is transported by air.

“In the first six months of FY09, JAE Europe spent in excess of £600,000 on freight charges, and the way the business was increasing, we were looking at spending in excess of £1.2m on our freight that year,” said Matt Harris, supply chain manager at JAE Europe.

“If you look at our turnover for 2010, it would have reached £1.5m.”

“Sea freight takes five weeks longer to get here, but is 20 per cent of the cost of the air freight. That £500,000 of predicted savings will come as a result of switching from air freight to sea freight.”

Harris said that he implemented Demand Planning because he needed to better predict what customers were going to buy in order to save costs.

Until the implementation, the company could predict up to three months in advance.

He said the firm is now able to forecast 12 to 24 months in advance with the confidence of knowing the company will not run out of stock.