Grow Your Sales Using Kanbans as a Service (KaaS)

kanbans, sales

You may be able to win new sales and lock in existing customers by enhancing your offerings with a value-added service

Businesses that sell commodity goods (as well as some non-commodity goods) can have a challenge differentiating themselves from their competitors. Pricing, far too often, becomes the only control that is exercised to entice new customers. But offering the lowest price can also be a race to the bottom that erodes your bottom line.

Echelon’s Scan2Request Kanbans as a Service (KaaS) can provide a low-cost, low-effort way to make your value propositions more attractive to existing customers as well as new sales prospects whether they’re down the street or across the country.

Avoid Competing on Price Alone

How can you stand out to your sales prospects without being the cheapest supplier? The answer is to sweeten your offerings by “decorating” them with ancillary services that:

Make it easier for customers to work with you
Make it easier for customers to reorder your product
Enable your customers to bypass any inventory inaccuracies they may have
Streamline your customers’ internal operations, making them more efficient
Prevent shortages and over-buying
Ensure always-on inventory
Routinely re-optimizes customers’ inventory levels to keep them in sync with demand

Kanbans as a Service (KaaS) is something that you can use as a sales aid to enhance your offering, entice new sales, and delight customers.

What is a Kanban?

A kanban is a mechanism that allows someone to reorder products, materials, or supplies from the point of use in a way that minimizes inventory, ensures stock availability, and doesn't rely on having accurate inventory.

The kanban can be thought of as a signaling mechanism that allows B2B consumers to tell suppliers when more stock is needed. Traditionally, paper cards have been used to convey these signals. The supplier responds by sending the consumer a pre-defined quantity of material designed to mitigate stockouts and shortages.

What is Kanbans as a Service (KaaS)?

Echelon Supply Chain Solutions has taken the kanban concept to the next level by introducing electronic barcode tags that are placed at or near stock positions. The customer simply scans the barcode when they want to request your product. A customer service agent on your end then receives the KaaS purchase request via our web portal, which provides a to-do list for entering inbound orders from multiple customers into your existing ERP or WMS system as sales orders in the normal way.

The whole system can be provided to your customers as a pre-configured system with an unlimited number of kanban tags for $3600/site/year. No ERP or WMS integration is required.

What Kinds of Products Work Well with KaaS?

The kinds of products that generally tend to work well with kanbans include any that meet one or more of the following criteria:

The customer holds the product in stock
The product must be regularly reordered to maintain proper stock
Economical (i.e., optimized) stock levels are desirable
Shortages or over-buying are undesirable
Reducing or eliminating the overhead of reordering would be beneficial
Inventory inaccuracies are prevalent
MRP purchasing requirements are often incorrect or unreliable
Consigned inventory (or VMI) is desired

Obviously, these can describe a wide variety of products and industries.

Typical use cases for kanbans involve production materials (direct or indirect), service parts, and consumable supplies. For example:

Chemicals, additives, and ingredients
Metals
Plastics
Packaging materials and supplies
Mechanical fasteners and components
Electronic components
Fluid components
Paper products
Spare parts
Shop supplies

Make Your Customer’s Life Easier

Echelon’s Scan2Request KaaS can be used to establish a direct line between your customer order entry specialists and the people at your customers’ sites who actually use your products. Your customers’ employees scan our electronic kanban tags directly at the points of use whenever they need more of your products. Sales order entry will be triggered accordingly for your organization.

Your customers now have an opportunity to bypass inaccurate inventory, unreliable MRP signals, and overloaded purchasing departments by using KaaS to submit replenishment requests directly from the points of use no matter where they’re located geographically.

The benefits of low inventory with no shortages will not go unnoticed.

Even if your customers’ MRP buying and inventory has historically worked well, they may still appreciate a lean approach that lessens the load on their purchasing department.

There are more ways to make this approach even more valuable to your customers:

Add recurring inventory optimization: Echelon can monitor your customers’ ordering activity and periodically re-optimize their kanban quantities to ensure that they’re always in sync with demand. If their sales go up, then their product orders to you will increase accordingly so that they are never caught in a bind.
Enable practical consigned (VMI) inventory: One of the challenges of maintaining consigned inventory with a customer (also called “vendor-managed inventory”) is that there may not be a good way to remotely monitor usage at the customer’s site to drive proper billing. Echelon’s KaaS provides a mechanism to overcome this in a way that allows both parties to view the same data.

Make Your Life Easier

When you use Echelon’s Kanbans as a Service (KaaS) to receive purchase requests directly from your customers’ points of use, you are bypassing any purchasing, inventory, or system management inefficiencies that may exist in your customers’ organizations. This opens the door to maintaining a stable and effective flow of products to your customers, thus assuring customer satisfaction while at the same time ensuring timely revenue recognition for you. How often do you have an opportunity for this kind of win-win?

There are more ways you can make this approach even more helpful to you:

Let Echelon enter and release KaaS customer orders into your ERP or WMS as your designated customer support administrator. Our transaction-based pricing is designed to reduce your indirect support costs by 30% to 50% relative to equivalent full-time staffing. This KaaS service option is called Scan2CustomerOrder.
Let Echelon periodically optimize your customers’ kanban quantities so that if their sales go up, then your product sales will increase accordingly. Many businesses are notoriously slow to adjust their inventory planning, which can result in them having to expedite orders to their suppliers. Echelon’s inventory optimization services give you a way to insulate yourself from customer-induced disruptions so that both you and your customers don’t get caught in a bind.

Some Examples - Using KaaS to Enhance Sales

The ways that you can use KaaS are limited only by your imagination. Here are some examples of how suppliers can use KaaS to entice new sales while earning you a competitive advantage:

A steel distributor quotes a fair price to provide critical raw materials to a manufacturer with the hopes of winning a lucrative long-term contract. The distributor wins the contract by offering the manufacturer the use of kanbans to trigger steel deliveries directly from the manufacturer’s factory floor. The manufacturer is motivated to do this because it allows them to reduce the load on its already overloaded purchasing department. It also ensures that they will effectively be protected against shortages for these critical raw materials.
A chemical supplier offers to sell solvents to a chemical manufacturer. However, the inventory of these solvents at the manufacturer’s site is often inaccurate because, in addition to them being used as production raw materials, they are also used to flush out production lines in between production runs. The quantity of solvents needed for flushing is hard to measure reliably, thus leading to inventory inaccuracies that make MRP-driven purchasing problematic. The supplier offers the manufacturer Echelon’s plug and play KaaS system so that solvent orders can proceed reliably and unimpeded. This serves as a useful case study that the supplier can use for future prospective customers.
A packaging supplier wants to sell corrugated materials to a manufacturer. However, the manufacturer’s products are highly customized such that packaging material SKUs are consumed ad hoc for each unique order. Planning for and maintaining a ready stock of packaging materials is therefore fundamentally challenging. The packaging supplier overcomes this by establishing a KaaS system at the manufacturer’s site to ensure that it is always well-supplied.
A plastics distributor offers a variety of polymeric raw materials to plastics manufacturers. However, some manufacturers have a problem keeping accurate inventory quantities for these materials, making MRP-driven purchasing unreliable. The distributor uses KaaS to quickly establish kanbans at manufacturers’ sites so they can easily replenish those materials on “auto-pilot” with minimum customer oversight.