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Johnson Controls Pioneers Automated Inventory Replenishment Program

24 September 1999

Johnson Controls Pioneers Automated Inventory Replenishment Program for Distributors

    MILWAUKEE, Sept. 23 -- Johnson Controls, Inc. is
the first controls manufacturer offering automated technology that helps
distributors reduce inventory levels, streamline purchasing and increase
sales.
    A jointly managed program called supplier-assisted inventory replenishment
(SAIR), the electronics-based system automates ordering and inventory
maintenance using electronic data interchange (EDI) and bar code technology.
SAIR facilitates inventory management in the supply chain, allowing
distributors and Johnson Controls to reduce inventory levels through automated
sales forecasting.  Daily sales histories, product seasonality, promotions and
other factors are evaluated to keep inventory at mutually agreed-upon levels.
    "SAIR is a powerful tool for our customers and for us," says Mark
Duszynski, vice president sales and marketing for systems products at Johnson
Controls.  "It tracks inventory levels automatically.  Parts and supplies are
replenished as a distributor needs them.  As a result, distributors keep lower
inventory levels while improving customer service and the company improves its
production forecasting and efficiency.  In addition, distributor resources
previously needed to support overstocked or understocked inventory levels can
be invested in new product lines."
    Johnson Controls partners with distributors to develop a stocking plan
based on mutually defined objectives and sales information supplied by the
distributor.  SAIR forecasts inventory needs based on distributors' actual
inventory turns instead of past orders.  It is a more accurate method to
determine future inventory needs.
    Climatic Control Company, Inc. in Milwaukee, one of several Johnson
Controls distributors chosen as a beta site for SAIR, has recently implemented
the system.  "SAIR allows us to focus less attention on the actual purchasing
function and more on inventory control," says Don St. Martin, director of
purchasing for Climatic Control. "It's a more proactive approach."
    The process for deploying SAIR involves both partners synchronizing
product data, reaching a stocking agreement, testing the process and then
beginning automatic replenishment.  SAIR complements the distributors'
existing inventory systems.  The two systems communicate daily via EDI, a
standard electronic transaction template.  Bar codes on products allow
distributors to easily track product sales and input new product shipments
received.
    "SAIR will enhance our distributors' existing inventory management systems
and bring the building controls industry up to par with other industries on
supply chain automation and cost containment practices," said Jennifer Clark,
distribution marketing manager of the Controls business for Johnson Controls.
"Savings on pre-paid freight and costly rush orders make SAIR a good
investment."
    Supplier assisted inventory management is not just for large companies.
Amcon Controls, Inc. in San Antonio is using SAIR and has only five employees.
According to Gary Tackett, Amcon's operations manager, "A benefit of SAIR is
that we're able to get products on a regular basis and we know when a shipment
is coming.  Previously, we would generate a purchase order and would not know
when the product would be shipped.  Now, our products are set aside for us."
    For more information about Johnson Controls visit its Web site at
http://www.johnsoncontrols.com
    Johnson Controls, Inc., is a global market leader in automotive systems
and facility management and control.  In the automotive market, it is a major
supplier of seating and interior systems and batteries.  For non-residential
facilities, Johnson Controls provides building control systems and services,
energy management and integrated facility management.  Johnson Controls,
founded in 1885, has headquarters in Milwaukee, Wis.  Its sales for 1998
totaled $12.6 billion.