Miele US increases productivity with IBS Enterprise

The Internet provides Miele Inc. with a path to higher profits by reducing processing costs and giving its dealers more flexibility

Miele increases productivity with IBS Enterprise.

Miele Inc. is the US subsidiary of the German appliance manufacturer and distributor founded in 1899 that now employs 15,000 people worldwide. In the spirit of the corporate philosophy of ‘Immer Besser’ (Forever Better), Miele strives to improve existing products and utilize the newest technologies.

Watch this video to hear how IBS software has opened the door to the use of the Internet for even faster dealer and consumer order processing. The web site is open 24 hours a day, seven days a week. Dealers and consumers submit orders at their own convenience. Through ordering online, transaction costs are reduced, and more profit is generated on the bottom line.

Company background

Miele was founded in 1899 and is a leading German manufacturer and distributor of domestic appliances, commercial equipment and kitchens. Miele Inc. is the US sales subsidiary of the German appliance manufacturer. In the spirit of the corporate philosophy of ‘Immer Besser’ (Forever Better), Miele strives to improve existing products and utilize the newest technologies.

Over 120 years have passed and their mantra, Immer Besser (which is translated to Forever Better), continues to represent the guiding principle and backbone of the organization. Immer Besser permeates every aspect of the business from the manufacturing line to the relationship with dealers and most important to the customers.

Today, the family owned company is one of Europe’s largest domestic appliance brands.

Core distribution requirements

Miele operates six manufacturing facilities in Germany and one in Austria. The company’s high-quality products include cook tops, ovens, dishwashers and vacuum cleaners. Its products are marketed worldwide via numerous subsidiaries and authorized importers. In fact, 64 percent of the company’s products are sold outside of Germany.

While the parent company is based in Germany, the US sales subsidiary is situated in New Jersey. Miele’s distribution setup consists of seven facilities across the continental United States.

Miele’s US dealers must fill their orders within the same day. Replenishment of inventory from manufacturing plants in Germany takes approximately two weeks. To avoid possible stock outs due to high demand, a system solution had to be found. Miele operates in an environment where product quality and durability, coupled with future-proof technology and outstanding after-sales service are the prime purchasing motives for consumer’s the world over. At the same time, a noticeable downturn in world economy has resulted in an associated drop in the demand for domestic appliances.

Miele needed a new IT solution that could handle the company’s core distribution operation - finance, sales and inventory control. In particular, Miele wanted to ensure product availability while maintaining low inventory levels.

Online ordering

Miele’s software selection team consisted of a half a dozen key managers. They evaluated a number of software vendors before selecting IBS supply chain management software based on the IBM System i platform and DB2 Database, IBS Enterprise.

IBS e-business software, IBS Netstore, forms the basis of a web site for Miele’s B2 B / B2C sites for both dealers’ and customer orders. This has been integrated into Miele’s ordering, logistics and information systems. The site provides online ordering capability and real-time information on product availability, pricing and status of orders. IBS Netstore now accounts for handling 50 percent of Miele’s appliance and vacuum business over the Internet.

On the procurement side, IBS software aids in forecasting. It gives the user purchase suggestions, which can be edited and turned into purchase orders. When product hits the door, the system prints out reception verification. It also designates a location within the warehouse for put away.

Of special note is the issuance of real-time data on inventory and product availability. When levels are low, a warning appears in the bottom of the screen, along with information as to when the item will be available and how long it will take to reach the warehouse. This feature helps Miele to keep product on hand despite the required lead-time to obtain it.

Implementation a success

An IBS project team has been supporting Miele’s initiative from the very beginning, making software modifications to suit the company’s specialized needs. Miele has a very strong relationship with IBS when it comes to software support.

Miele went through many positive changes after implementation. The product support and knowledge the company received  from IBS helped ease it through the radical transition.

The success of the new business software solution at Miele Inc has lead to IBS supply chain software being implemented at Miele subsidiaries in Canada, Norway, Denmark, Sweden, Finland and Australia.

Increased productivity and profits

Despite the shaky world economy and a downturn in the demand for domestic appliances, Miele Inc has experienced a steady growth over the years. IBS software has played an important role in managing this phenomenal growth.

The sales order management software from IBS has streamlined the manner in which US orders flow to the plants in Germany, lessening the need for safety stock. The switch from manual to automated forecasting has enabled Miele to reduce inventory levels. Inventory on hand has been cut from three months to just two.

Miele is now prepared to handle any fluctuation in inventory, from a miniscule rise to doubling demand for the inventory it receives and ships out. IBS software and experience has enabled Miele to better understand how to set up its systems to accommodate a somewhat unpredictable situation.

Customer service has also benefited from the new software. Quick access to information throughout the company and automatic posting to the financial side have improved efficiency.

IBS e-Business software has opened the door to the use of the Internet for even faster dealer and consumer order processing. The web site is open 24 hours a day, seven days a week. Dealers and consumers submit orders at their own convenience. Through ordering online, transaction costs are reduced, and more profit is generated on the bottom line.

Download Full Case Study Miele, PDF

Company profile

Name: Miele Inc.

Region: USA

Operation: Manufacturing and distribution

Products: Domestic appliances such as dishwashers, vacuum cleaners, cook tops, ovens, and commercial equipment

Employees: +15,000 worldwide

Revenue: EUR 2.74 billion

Website: Miele Inc.

Issues

  • Need for outstanding customer service
  • Long lead-times on orders from manufacturing plant in Germany
  • One day order fulfillment to customers
  • Need to maintain low inventory levels
  • Need to ensure product availability.

Solution

  • Supply chain solution for electrical product distribution, modules for:
  • e-Business (B2B & B2C)
  • Sales order management software
  • Distribution software
  • CRM software
  • Procurement software
  • Inventory management software
  • Warehouse management software
  • Business intelligence
  • Financials software
  • UPS integrated tracking system.

Capabilities

  • Fast, single line order entry
  • 24/7 dealer ordering via Internet
  • Stock-level optimization
  • Real-time inventory data
  • Real-time product information
  • Supply chain visibility
  • Enhanced logistics planning
  • Optimized picking
  • Enhanced procurement.

Value

  • Strong annual revenue growth
  • Reduced inventory levels
  • Inventory on hand reduced from three to two months
  • Increased profit
  • Reduced order transaction costs
  • Improved customer service
  • International synergies.
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